Pricing and Carbon Emission Reduction Effort Decision in an Electric and Gasoline Vehicle Supply Chain Considering Government: a Game Theory Approach
Subject Areas : Electrical and Computer Engineering
Mohammad Mahdi Sheikhi-Nasrabadi
1
,
Hossein Khosroshahi
2
1 - Department of Industrial and Systems Engineering, Isfahan University of Technology, Isfahan, Iran
2 - Department of Industrial and Systems Engineering, Isfahan University of Technology, Isfahan, Iran
Keywords: Pricing, Electric vehicle, Carbon emission reduction, Sustainable supply chain, Game theory, Stackelberge competition,
Abstract :
While the market for new electric vehicles is growing significantly, some environmental issues, such as carbon emissions, are often attributed to the production of electric cars. In this research, a supply chain including a manufacturer that sells electric and gasoline vehicles through a retailer was investigated. A game theory approach has been used for modeling and problem solving. The assumption was made that the government, as a leader or pioneer, implements various policies based on the concept of sustainability. Consequently, the manufacturer and retailer seek to maximize their profits in the Stackelberg competition based on these policies. As a result of this research, managerial insights for real-world application were obtained. For instance, thresholds for coefficients and parameters, such as the conversion rate of environmental value to financial value, were identified. These show that if green investment in production lines depends on product demand, the market (or consumer) price and the factory price of electric cars will be higher compared to a scenario where the importance of green investment for the government is independent of demand. However, in the first scenario explained, the government provides more support for electric cars. To provide practical managerial insights in the real world, this research focused on parametric analyses.
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