Expert Systems With Applications 237 (2024) 121606

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Expert Systems With Applications

journal homepage: www.elsevier.com/locate/eswa

Decision-making in a low-carbon supply chain considering consumers’

fairness concerns✩
Haohao Song a , Ying Wang a ,∗, Xiangyu Mao a , Chunyang Wang b
a
College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, Jiangsu, China
b
Nanjing Institute of Space Management, Nanjing, Jiangsu, China

ARTICLE INFO ABSTRACT

Keywords: The purpose of our study is to discuss the impact of consumers’ market distribution and consumers’ fairness
Low-carbon supply chain management concerns on the decisions of supply chain participants. Based on utility theory, we innovatively incorporate
Stackelberg game consumers’ fairness concerns as a significant factor into the game model and focus on the impact of the
Heterogeneous preferences
utility gap between products on consumers’ purchasing willingness. In this paper, we establish a two-echelon
Consumers’ market distribution
supply chain consisting of one traditional manufacturer, one low-carbon manufacturer, and one retailer, and
Consumers’ fairness concerns
comparatively analyze the equilibrium results under the initial state and consumers’ fairness concerns. The
results show that the presence of consumers’ fairness concerns results in the higher wholesale price, higher
retail price, and larger profit of low-carbon products yet leads to a decline in traditional products’ pricing
and profit, and the impacts on the low-carbon manufacturer are more significant than on the traditional
manufacturer. A reduction appears in the retailer’s profit since consumers’ fairness concerns decrease the
retailer’s ability to differential pricing. Additionally, the impacts of consumers’ fairness concerns on the game
equilibrium are also affected by consumers’ market distribution and low-carbon manufacturers’ technical
efficiency, and the impacts are more pronounced in an environment where low-carbon manufacturers’ R&D
investments are more efficient. Furthermore, in a market dominated by low-carbon preferred consumers, low-
carbon manufacturers are always more profitable than traditional manufacturers, while in a market dominated
by traditionally preferred consumers, low-carbon manufacturers are only able to achieve higher profits than
traditional manufacturers when R&D is quite efficient and consumers’ fairness concerns are relatively strong.

1. Introduction
With the rapid development of industrial technology recently,
global warming becomes increasingly serious (Xia, Lu, & Wang, 2023;
Zhao et al., 2021). To mitigate the global greenhouse effect, countries
around the world have reached a consensus on emission reduction
and pledged to promote low-carbon development (Gregory, 2022; Luo,
Zhou, Song, & Fan, 2022; Zhang, Ma, Si, Liu and Liao, 2021). Under
this circumstance, consumers are more conscious of environmental
protection when purchasing a product, thereby products’ green perfor-
mance become a critical factor that significantly influences consumers’
purchasing willingness in addition to product quality and price (Li,
Meng, Li, & Du, 2022; Zhang, Xin et al., 2021). Manufacturers, as the
main upstream participants in the supply chain, are taking action to
improve products’ green level as well as to enhance their corporate
images (Heydari, Govindan, & Basiri, 2021; Li, Cui, Li, Xu and Xu,
2021; Liang & Futou, 2020). For instance, in an effort to reduce
environmental pollution from exhaust emissions, Toyota has introduced
the Prius, a greener alternative to the regular model (Zhang, Yu, Tan,
Yin and Randhir, 2021). Similarly, Haier also has proposed a four-
stage green strategy, which is committed to advancing the low-carbon
upgrade of China’s household electrical appliances (Huang, Zhang, Ren,
& Zhou, 2019). It is undeniable that low-carbon technology investment
is an important approach to decarbonizing the final product of the
supply chain, however, due to the high cost of pollution control, the
uncertainty of R&D results, and the probability of positive externalities,
it may inhibit channel members’ motivation to conduct low-carbon
R&D independently (Hong, Cao, Gong, & Chen, 2021; Jiang, Wang,
Cao, & Fan, 2021; Shi, Liu, Du, & Cheng, 2023). Thus, in order to
better demonstrate the impact of consumers’ preference for low-carbon
products on supply chain members, our study constructs a two-stage

✩ Our study is supported by National Natural Science Foundation of China (Grant No. 71873064) and Social Science Fund Project of Jiangsu Province (Grant
No. 21EYB008).
∗ Corresponding author.
E-mail addresses: haohaosong@nuaa.edu.cn (H. Song), yingwang@nuaa.edu.cn (Y. Wang), maoxiangyu@nuaa.edu.cn (X. Mao), mengnjc@hotmail.com
(C. Wang).

https://doi.org/10.1016/j.eswa.2023.121606
Received 28 September 2022; Received in revised form 18 August 2023; Accepted 11 September 2023
Available online 20 September 2023
0957-4174/© 2023 Elsevier Ltd. All rights reserved.
H. Song et al.
with both traditional and low-carbon manufacturers and comparatively
analyzes the different influences of consumers’ low-carbon preferences
on both parties.
Although products with green performance can make consumers
reap more benefits than traditional products, these products usually
are more expensive, which requires consumers to have a higher ability
to pay (Lin, Fan, Tan, & Zhu, 2021; Xu, Jing, Shen, Zhou, & Zhao,
2023). Moreover, many low-carbon products need corresponding sup-
porting facilities to use, resulting in the existing traditional equipment
becoming sunk costs, which also makes consumers more cautious when
choosing to purchase low-carbon products (Li, Hu, Shi and Wang, 2021;
Wang, Fan, Shen, & Jin, 2020). Based on these reasons, it is difficult
for all consumers to immediately transform from traditionally preferred
consumers to low-carbon preferred consumers, and the coexistence of
low-carbon preferred consumers and traditionally preferred consumers
will be a common phenomenon in the market (Liu & Xiao, 2020;
Pal, Sarkar, & Sarkar, 2023). Hence, the distribution of consumers
with different preferences in the market becomes a crucial factor,
and supply chain participants may take different actions in two cases
where low-carbon preferred consumers account for the majority and
traditionally preferred consumers account for the majority. However,
the existing research tends to assume that all consumers in the whole
market will purchase green products (Chen, Su, Wu, & Zhou, 2022;
Wang et al., 2020), or just analyzes whether consumers will purchase
green products or traditional products based on the Hotelling model
(Gan, Li, Wang, Zhang, & Huang, 2021; Liu, Liu, Wang, Cui, & Han,
2021). Different from these studies, our paper sets up the market
with both traditionally preferred consumers and low-carbon preferred
consumers, and investigates the decision-making behaviors of supply
chain participants under different market distributions.
Additionally, due to the development of information technology,
consumers can easily obtain information on products’ price, quality,
and green performance, which makes it a common phenomenon that
consumers will compare the purchasing effectiveness of homogeneous
products (Gu, Yang, & Huo, 2021; Ma, Hu, & Yao, 2021). Given
the mismatch of greenness and price between products, consumers’
fairness concern about products’ utility difference is emerging as a
non-negligible issue in achieving internal consistency and integral de-
carbonization of the supply chain (Li & Jain, 2016; Ren, Wang, Zeng,
& Yuan, 2022; Xu et al., 2021). As a matter of fact, supply chain
members’ fairness concerns are not something new. For now, although
peer-induced fairness concerns among peers and distributional fair-
ness concerns between upstream and downstream enterprises have
been widely explored by scholars (Jian, Li, Zhang, & Su, 2021; Liu,
Wang, Shen, Yan, & Wei, 2018; Zhong & Sun, 2022), only a small
portion of literature touch upon the impacts of consumers’ fairness
concern in the supply chain (Jiang, Ji, Wu, & Lu, 2023; Zhang, He,
& Zhang, 2022). Essentially, although low-carbon preferred consumers
are willing to purchase green products at a higher price than traditional
products, however, their purchasing desire will shrink significantly
when the utility of a green product is lower than that of a traditional
product (Alderighi, Nava, Calabrese, Christille, & Salvemini, 2022;
Huang, Zhang, & Fan, 2022; Zhang & Zheng, 2022). Therefore, our
paper includes consumer fairness concern about the utility differences
between purchasing traditional and low-carbon products as a signifi-
cant influencing factor and discusses its impact on channel members’
decision-making by comparing the equilibrium results.
Given that both consumers’ market distribution and fairness con-
cerns have a significant impact on channel members’ decision-making,
while few existing literature combines these two factors to analyze
low-carbon supply chain issues, our study includes consumers’ market
distribution and fairness concerns as important parameters for supply
chain participants’ decision-making. In this paper, consumers are di-
vided into traditionally preferred consumers and low-carbon preferred
consumers and their purchasing preferences are assumed not to change
easily. Our research is designed to answer the following questions:
2
Expert Systems With Applications 237 (2024) 121606
(1) How do consumers’ low-carbon preferences, market distribution,
and low-carbon manufacturers’ R&D efficiency influence the decision-
making of supply chain participants in the initial status? (2) Compared
with the initial status, how does consumers’ fairness concern affect
game equilibrium, and how does it affect equilibrium results in dif-
ferent market environments? (3) What market environments are more
favorable for manufacturers to conduct low-carbon investments? In
consequence, we conduct a two-echelon supply chain consisting of
one traditional manufacturer, one low-carbon manufacturer, and one
retailer in a market composed of traditionally preferred consumers and
low-carbon preferred consumers, where manufacturers are the leader
in the chain and there is a Cournot competition between two manufac-
turers. In our study, we incorporate consumers’ market distribution and
fairness concerns as significant factors into the game model and then
discuss the game equilibrium in initial status and consumers’ fairness
concerns. A comparison between the outcomes in the different market
environments will also be conducted. Based on the above analysis, we
will provide some advice for the manufacturers and the retailer.
The remainder of the paper is organized as follows. In Section 2,
we will briefly review the related literature. In Section 3, our research
describes the problem and derives the manufacturer’s optimal strategies
in the initial status and under consumers’ fairness concerns, respec-
tively. In Section 4, we compare the game equilibrium results between
initial status and consumers’ fairness concerns. Numerical analysis is
conducted to validate the propositions and obtain some interesting
results in Section 5. The conclusions and management insights are
summarized in Section 6.
2. Literature review
Our study is highly related to the issue of enterprises’ low-carbon
efforts, consumers’ heterogeneous preferences, and consumers’ fairness
concerns in the supply chain. Thereby, we will briefly review relevant
literature on low-carbon supply chain management, supply chains with
consumer heterogeneous preferences, and supply chains with fairness
concerns in the following.
2.1. Low-carbon supply chain management
With consumers’ awareness of environmental protection under the
circumstance of global warming, low-carbon transformation and up-
grading of supply chains are extremely urgent (Kang & Tan, 2023;
Mirzaee, Samarghandi, & Willoughby, 2023). For now, a large amount
of literature has examined the role of supply chain members’ actions in
pollution control (Song, Wang, Yang, Duan, & Liu, 2020), green produc-
tion (Liu et al., 2022), and low-carbon technology investment (Chen,
Wang, & Zhou, 2019) on supply chain decarbonization. Wu, Zhang,
and Chen (2021) discovered that the enterprises’ economic perfor-
mance was mainly determined by the level of their green contribution,
while the R&D efficiency, spillover effect, and power relationship with
supply chain partners were essential influencing factors for the level
of their green contribution. In reality, due to the requirements of
large capital and sophisticated talents in low-carbon strategies, it is
risky for enterprises to bear the cost of low-carbon efforts alone.
Hence, channel members’ cooperation in low-carbon investments grad-
ually becomes a common phenomenon. Yu, Wang and Liu (2022)
concluded that vertical collaboration among supply chain members
would reduce carbon emission rates and product prices, while horizon-
tal collaboration among manufacturers would reduce retailers’ profits
and customers’ benefits. Wang, Yu, Jin, and Mao (2021) constructed a
low-carbon supply chain consisting of a dominant retailer and a small
and medium-sized manufacturer and suggested that the coordination
contract between the manufacturer and retailer could achieve mutual
benefits for both. Additionally, government policy implementation is
another important driving force for supply chain low-carbon upgrading.
Wang et al. (2021) excavated the carbon emissions reduction decision
H. Song et al.
of the construction supply chain under government subsidies and found
the carbon emission reduction and the market demand could reach the
optimal value for all channel members under the decentralized deci-
sion. Long et al. (2022) respectively constructed a Stackelberg game
model dominated by the manufacturer and retailer under government
subsidies and found that the increase of government price subsidies was
beneficial to market demand and social welfare, and the effect was
more significant when consumers’ green preferences were large. Wu
and Kung (2020) demonstrated that the government could use a carbon
tax to encourage traditional supply chains to upgrade their carbon
technologies as well as to encourage financial institutions to provide
preferential loans to supply chains whose carbon technologies were
at a disadvantage in the market. Chen et al. (2022) constructed a tri-
partite supply chain composed of the government, manufacturers, and
retailers, and discussed the equilibrium results under the government
objectives of social welfare maximization and utility maximization.
Their results showed that the government objective of utility maxi-
mization benefited more consumer groups than that of social welfare
maximization. From the abovementioned literature, it is obvious that
corporate low-carbon effort is a crucial incentive for low-carbonization
throughout the supply chain. Our study also aims to analyze the impact
of enterprises’ low-carbon efforts on channel members’ decisions. In
contrast to the previously mentioned literature, we divide consumers
in the market into traditionally preferred consumers and low-carbon
preferred consumers, and further explore the impacts of consumers’
low-carbon preference on the equilibrium results under different mar-
ket distributions of consumers, so as to expand the research in this
field.
2.2. Supply chain with consumer heterogeneous preference
In the context of the information age, consumer demands for prod-
ucts are becoming more diversified and personalized, which has forced
supply chain participants to take consumer heterogeneous preferences
into consideration when they make strategic decisions (Jang & Choi,
2021; Tang, Wang, & Zhou, 2020; Wang & Hou, 2020). The devel-
opment of information technology has made the coexistence of on-
line chains and offline chains become a common phenomenon, thus
some scholars have examined the impact of consumer heterogeneity
in channel preferences on supply chain participants’ decision-making.
Liu, Li, Ren, and Forrest (2020) introduced the different levels for
consumer preference of network channels into dual-channel supply
chain decisions and discovered that consumers’ network preferences
had significant effects on enterprises’ optimal pricing, demand, and
profitability. Zhang, Dai, Sun, Zhang, and Yang (2020) modeled a
dual-channel supply chain consisting of multiple competing manufac-
turers and multiple competing retailers. They claimed that the increase
in raw material conversion rate always benefited all participants of
the dual-channel supply chain. Additionally, other scholars analyzed
consumers’ differential preferences for product characteristics such as
brand, quality, and functionality. In particular, under the circumstance
of the low-carbon economy, a large body of literature lucubrated the
role of consumers’ low-carbon preferences in supply chain participants’
decisions. Cheng, Ji, Zhang, and Shi (2022) believed that the improve-
ment of consumers’ environmental awareness had a positive impact on
the operation of the supply chain network and could achieve synergy
between economic and ecological goals under certain conditions. Sun
et al. (2020) constructed a Stackelberg game model dominated by
the manufacturer and demonstrated that the low-carbon preference of
consumers could increase channel members’ profits only when the lag
of emission reduction technology was relatively small. Wang and Hou
(2020) argued that consumers’ green preferences significantly affected
the green level of the final product of the supply chain, which in
turn contributed to the greening and upgrading of the supply chain
and the improvement of social welfare. The aforementioned literature
generally agrees that market distribution of consumers with different
3
Expert Systems With Applications 237 (2024) 121606
preferences in product channels and characteristics will affect supply
chain enterprises’ strategies. However, these studies only consider the
impact of consumers’ preferential behavior in product heterogeneity
on the supply chain. In fact, when consumers purchase products, they
not only have heterogeneous preference behavior but also fairness
concern behavior of comparing the purchasing utility of different prod-
ucts, both of which will affect the channel members’ decisions, yet
the latter is rarely considered in the above literature. Therefore, this
paper will further explore the impact of consumers’ fairness concerns
regarding the utility gap between traditional and low-carbon products
on supply chain members’ decisions. A joint impact of consumers’ low-
carbon preference and fairness concern on the game equilibrium will
be discussed and a comparison of the magnitude of these two factors’
influence on the equilibrium will simultaneously be conducted.
2.3. Supply chain with fairness concerns
Fair and reasonable benefit distribution is an essential founda-
tion for supply chain participants to achieve long-term and stable
coordination (Adhikari & Bisi, 2020; Feng, Li, Zhou, & Wu, 2022;
Pan, Cui, Xing, & Lu, 2020). As a member of the supply chain, each
participant is concerned not only with its revenue but also with the
gap between its revenue and that of other participants. In view of
the fact that channel members were concerned about the fairness of
income distribution, Cui, Raju, and Zhang (2007) initially introduced
fairness concerns into a supply chain model and explored the impact
of fairness concerns on channel members’ pricing. After that, a large
number of scholars have conducted research on the issue of partici-
pants’ fairness concerns in supply chains (Sharma, Dwivedi, & Singh,
2019; Zhong & Sun, 2022). At this stage, the existing literature about
fairness concerns mainly concentrates on distributional fairness con-
cerns between upstream and downstream participants and peer-induced
fairness concerns among peers. Regarding the issue of distributional
fairness concerns, Jian et al. (2021) constructed a Stackelberg game
model with a fairness-concerned manufacturer and analyzed the game
equilibrium under centralized and decentralized decision-making. The
results suggested that the manufacturer’s fairness concern was detri-
mental to the environmental performance and may lead to a waste
of resources. Similarly, Sarkar and Bhala (2021) demonstrated that
a constant wholesale price contract could coordinate a decentralized
channel in a manufacturer-dominated supply chain when the retailer’s
dominance inequality aversion was strong enough. Their research ar-
gued that the collection rate of channel partners was higher and both
parties were richer under the manufacturer collection model. Regarding
the issue of peer-induced fairness concerns, Pan et al. (2020) built
a two-echelon supply chain consisting of one dominant retailer and
two following manufacturers and believed that the increase of manu-
facturers’ peer-induced fairness concerns was disadvantageous to the
profits of the manufacturers while was advantageous to the profits
of the retailer and the entire supply chain. Li, Xu, Li, Du and Ye
(2021) also investigated the peer-induced fairness concerns in the case
of one re-manufacturer and two recyclers and concluded that channel
coordination could be achieved through a simple constant transfer
price contract under certain conditions. Moreover, a few scholars have
introduced consumers’ fairness concerns into the research on the supply
chain. Li and Jain (2016) studied the impact of consumers’ fairness
concerns on enterprises’ behavior-based pricing (BBP) strategies, prof-
its, consumer surplus, and social welfare, suggesting that implementing
BBP was more profitable and could improve social welfare when con-
sumers’ fairness concerns were strong enough. Yi, Wang, Liu, and
Chen (2018) manifested that when consumers were extremely fairness
concerned, it would be the optimal decision for the manufacturer to
decentralize its distribution channel downward by using agency sales,
and direct sales would be a better strategy for manufacturers when
consumer fairness concerns were relatively weak. Yu, Wang, Feng, Bao
and Han (2022) found that incentives provided by manufacturers can
H. Song et al.
mitigate consumer fairness concerns for national brands and could
effectively discourage retailers from establishing their brands under
certain conditions. Diao, Harutyunyan, and Jiang (2022) constructed
a two-stage supply chain model and analyzed the impact of consumers’
fairness concerns on dynamic pricing strategies and channel profits of
enterprises. Their research indicated that consumers’ fairness concerns
could bring win-win results for manufacturers and retailers. Despite
the literature on fairness concerns in supply chains being extensive,
few scholars have studied the impact of consumers’ fairness concerns
about products’ utility on participants’ decision-making in a market
where there are both low-carbon preferred and traditionally preferred
consumers. Therefore, based on consumers’ fairness concerns about
the difference in purchasing utility between traditional and low-carbon
products, this paper will construct a two-echelon supply chain in a mar-
ket environment where there is a segmentation of low-carbon preferred
consumers and traditionally preferred consumers. In contrast to the
existing literature, we will analyze the joint influence of consumers’
market distribution and fairness concerns on supply chain pricing
decisions and compare the magnitude of the role of different factors
in influencing the outcome of the game.
3. Model and analysis
In our work, we construct a two-echelon supply chain consisting
of one traditional manufacturer 𝑀1 , one low-carbon manufacturer
𝑀2 , and one retailer 𝑅. It is assumed that there are only tradition-
ally preferred consumers and low-carbon preferred consumers in the
whole market and consumers will not change their preferences. For
the convenience of subsequent calculation and analysis, without loss of
generality, we refer to the studies of Meng, Li, Liu, Li, and Zhang (2021)
and Zheng and Li (2023) and suppose that the market volume is 1.
Traditionally preferred consumers and low-carbon preferred consumers
respectively are 𝜃 and 1−𝜃 (0 ≤ 𝜃 ≤ 1), which is similar to the model set-
tings of Zhang and Zheng (2022). Manufacturer 𝑀1 and manufacturer
𝑀2 respectively produce traditional products and low-carbon products
at unit costs 𝐶1 and 𝐶2 , and sells them to retailer 𝑅 at wholesale price
𝑊1 and 𝑊2 . Then, retailer 𝑅 sells traditional products and low-carbon
products to traditionally preferred consumers and low-carbon preferred
consumers, with retail prices of 𝑃1 and 𝑃2 respectively. Following He,
Wang, Shi, and Liao (2021) and Jian et al. (2021), we assume that
the greenness of the traditional product is 𝐺 and the greenness of the
low-carbon product is 𝐺 + 𝑔. To ensure that the formula has economic
significance, the green degree of traditional products should be non-
negative, that is, 𝐺 ≥ 0, while 𝑔 > 0 indicates that low-carbon R&D
will lead to a higher green level of low-carbon products than traditional
products. In our study, we suppose that low-carbon products require
2
additional investment 𝜇𝑔2 (𝜇 > 0) from manufacturer 𝑀2 (Jian et al.,
2021), which means that low-carbon products need more cost inputs
and the green degree of low-carbon products is highly related to the
invested capital. Since we do not discuss the impact of low-carbon R&D
on manufacturers’ unit costs and the values and size relationship of
𝐶1 and 𝐶2 will not affect the subsequent conclusions, to simplify the
derivation of the model, we assume that 𝐶1 = 𝐶2 = 0, which is similar
to the research of Zhang, Yu et al. (2021). Similarly, since the follow-up
study mainly analyzes the comparative advantages of the green degree
of low-carbon products over traditional products, that is, the size of 𝑔,
added with that the change of 𝐺 has little effect on the subsequent
conclusions, we also assume that 𝐺 = 0. In the following section,
we will separately discuss the results of the game equilibrium under
the initial state and consumers’ fairness concern, and then analyze
the impacts of different parameters on the equilibrium outcomes. A
comparison of the game equilibrium between the two states will be
further investigated. The descriptions of different parameters are shown
in Table 1.
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Expert Systems With Applications 237 (2024) 121606
3.1. Initial state
Low-carbon development has become an important trend in supply
chains at this stage. As consumers’ low-carbon awareness increases,
they are gradually willing to buy greener products, and manufacturers
in the supply chain are increasing their R&D investment in green
technology to improve the green level of their products. However, there
are still some consumers who prefer to purchase traditional products.
Hence, in this section, we will calculate the game equilibrium under the
initial state and analyze the impacts of different parameters on the re-
sults. In this paper, consumers are divided into two groups, traditionally
preferred consumers and low-carbon preferred consumers, with tradi-
tionally preferred consumers only buying products from manufacturer
𝑀1 and low-carbon consumers buying products from manufacturer 𝑀2 .
Although low-carbon preferred consumers and traditionally preferred
consumers only buy corresponding products, their purchasing desire
will still be affected by the price of alternative products, which is also in
line with economic reality. Thus, we assume that the parameter price
of the products is 1, the price parameter of alternative products is 𝛽
(0 < 𝛽 < 1) (Pan et al., 2020; Wu & Kung, 2020), and the parameter
of consumers’ low-carbon preference is 𝛾 (𝛾 > 0) (Jian et al., 2021; Lin
et al., 2021; Wang et al., 2021). At this time, consumer demands 𝐷1 for
traditional products and consumer demand 𝐷2 for low-carbon products
respectively are:
𝐷1 = 𝜃 − 𝑃1 + 𝛽𝑃2 , 𝐷2 = 1 − 𝜃 − 𝑃2 + 𝛽𝑃1 + 𝛾𝑔. (1)
Thus, the profits of the manufacturer 𝑀1 , 𝑀2 , and the retailer 𝑅
respectively are:
𝜇𝑔 2
𝜋𝑀1 = 𝑊1 𝐷1 , 𝜋𝑀2 = 𝑊2 𝐷2 − , 𝜋𝑅 = (𝑃1 − 𝑊1 )𝐷1 + (𝑃2 − 𝑊2 )𝐷2 . (2)
2
Solve the game in reverse. The specific process is shown in Ap-
2
pendix A. When 𝜇 > 𝛾4 , the game equilibrium is:
𝛾(2 − 2𝜃 + 𝛽𝜃)
𝑔= , (3)
2(4𝜇 − 𝛽 2 𝜇 − 𝛾 2 )
𝜃(4𝜇 − 𝛾 2 ) + 2𝛽𝜇(1 − 𝜃) (2 − 2𝜃 + 𝛽𝜃)𝜇
𝑊1 = 2𝐷1 = , 𝑊2 = 2𝐷2 = , (4)
2(4𝜇 − 𝛽 2 𝜇 − 𝛾 2 ) 4𝜇 − 𝛽 2 𝜇 − 𝛾 2
(2𝛽 2 − 3)𝛾 2 𝜃 + 2𝜇[6𝜃 + 𝛽(5 − 2𝛽 2 ) + 𝛽𝜃(1 + 2𝛽)(2𝛽 − 5)]
𝑃1 = , (5)
4(1 − 𝛽 2 )(4𝜇 − 𝛽 2 𝜇 − 𝛾 2 )
2𝜇[6 − 6𝜃 + 5𝛽𝜃 + 𝛽 2 (3𝜃 − 2𝛽𝜃 − 3)] − 𝛽𝛾 2 𝜃
𝑃2 = , (6)
4(1 − 𝛽 2 )(4𝜇 − 𝛽 2 𝜇 − 𝛾 2 )
[𝜃(4𝜇 − 𝛾 2 ) + 2𝛽𝜇(1 − 𝜃)]2 𝜇(4𝜇 − 𝛾 2 )(2 − 2𝜃 + 𝛽𝜃)2
𝜋𝑀1 = , 𝜋𝑀2 = , (7)
8(4𝜇 − 𝛽 2 𝜇 − 𝛾 2 )2 8(4𝜇 − 𝛽 2 𝜇 − 𝛾 2 )
4𝜇2 [2𝜃(2 − 𝛽)2 (𝛽 − 1)(𝜃 − 1) − 4 − 5𝛽 2 ] + 4𝛾 2 𝜃𝜇[3𝛽 + (2 − 𝛽)(1 − 𝛽)𝜃] − 𝛾 4 𝜃 2
𝜋𝑅 =
16(1 − 𝛽 2 )(4𝜇 − 𝛽 2 𝜇 − 𝛾 2 )
(8)
To further ensure the economic significance, in the subsequent
analysis of the equilibrium results and numerical simulation studies,
𝛾2
we only analyze the situation when 𝑔 is positive, that is, 𝜇 > 4−𝛽 2.
Proposition 1. 𝑔, 𝑊1 , 𝑊2 , 𝐷1 , and 𝐷2 are increasing functions with
respect to 𝛽, 𝛾 and decreasing functions with respect to 𝜇. 𝑔, 𝑊2 , and 𝐷2
are decreasing functions with respect to 𝜃, while 𝑊1 and 𝐷1 are decreasing
𝛾2 𝛾2
functions with respect to 𝜃 when 4−𝛽 2 < 𝜇 < 4−2𝛽 and increasing functions
𝛾2 𝛾2
when 𝜇 > . When 𝜇 = , 𝑤1 and 𝐷1 are independent with 𝜃.
4−2𝛽 4−2𝛽
From Proposition 1, it is clear that an increase in the price param-
eter of alternative products 𝛽 and consumers’ low-carbon preference
parameter 𝛾 will result in an increase in the product’s greenness at
equilibrium, as well as an increase in the wholesale price of the
products of manufacturer 𝑀1 and 𝑀2 . It is easy to understand that
the increase in the price parameter of alternative products and low-
carbon preference parameter will lead to an increase in the market
demand for the product, and then manufacturer 𝑀2 will have more
funds to invest in green R&D and thus improve the greenness level
H. Song et al. Expert Systems With Applications 237 (2024) 121606

Table 1
Description of different parameters.
Parameters Descriptions
𝛽 Parameter of alternative products’ price
𝛾 Parameter of consumers’ low-carbon preference
𝜃 Proportion of traditionally preferred consumers
𝜇 R&D parameter of low-carbon manufacturer
𝜆 Parameter of consumers’ fairness concerns on products’ utility
𝑔 Greenness of low-carbon products
𝑖, 𝑖 ∈ {1, 2} Subscript of traditional channel and low-carbon channel
𝑀𝑖 Traditional manufacturer and low-carbon manufacturer
𝑅 Retailer
𝑊𝑖 Wholesale price of traditional manufacturer and low-carbon manufacturer
𝑃𝑖 Retail price of traditional manufacturer and low-carbon manufacturer
𝐷𝑖 Demand of traditional products and low-carbon products
𝑈𝑖 Utility of traditional products and low-carbon products
𝜋𝑀1 ,𝑀2 ,𝑅 Profits of traditional manufacturer, low-carbon manufacturer, and the retailer
∗ Superscripts of fairness concerned

of low-carbon products. Benefited by the increase in the wholesale
price of manufacturer 𝑀2 , 𝑀1 will also increase the wholesale price.
Additionally, the increase in green technology R&D parameter means
that manufacturer 𝑀2 requires more R&D funds to achieve the same
R&D results, which is obviously detrimental to manufacturer 𝑀2 and
will lead to a reduction in R&D investment. This further leads to
a reduction in the greenness of the product and inevitably leads to
a reduction in the wholesale price of the manufacturer 𝑀2 . As a
result, 𝑀1 will also reduce the wholesale price to increase its potential
market demand. Moreover, the higher the market share of low-carbon
preferred consumers, the more favorable it is for the manufacturer 𝑀2
to increase its R&D investment and thus enhance the wholesale price of
the products, whereas the impact of low-carbon preferred consumers’
market share on manufacturer 𝑀1 ’ wholesale pricing is uncertain. The
wholesale price of 𝑀1 decreases with the increase of 𝜃 when 𝜇 is
small and increases with the increase of 𝜃 when 𝜇 is large. Obviously,
when R&D efficiency is low, manufacturer 𝑀1 can only increase its
market competitiveness by reducing its wholesale price, while when
R&D efficiency is high, the wholesale price of 𝑀1 increases with the
increase of market share.
Proposition 2. 𝑃1 and 𝑃2 are increasing functions with respect to 𝛾 and
decreasing functions with respect to 𝜇. 𝑃2 is a decreasing function with
𝛾2
respect to 𝜃. 𝑃1 is a decreasing function with respect to 𝜃 when 4−𝛽 2 <
(3−2𝛽 2 )𝛾 2
𝜇 < 2(2𝛽 3 −3𝛽 2 −5𝛽+6)
and a increasing function when 𝜇 > 2(2𝛽 3 −3𝛽 2 −5𝛽+6)
(3−2𝛽 2 )𝛾 2
When 𝜇 = 2(2𝛽 3 −3𝛽 2 −5𝛽+6) , 𝑃1 is independent with 𝜃.
From Proposition 2, it is clear that the retail prices of traditional
products and low-carbon products increase with the increase of the
alternative product price parameter and decrease with the increase
of the R&D parameter. Combined with Proposition 1, it is easy to
understand that the increase of the alternative product price parameter
will significantly raise consumer demands, which leads to an increase
in the manufacturers’ wholesale price and in turn leads to an increase in
the retailer’s price to the consumer. Conversely, a larger R&D parameter
will reduce R&D investment, which will lead to lower retail prices of
traditional products and low-carbon products.
Proposition 3. 𝜋𝑀1 and 𝜋𝑀2 are increasing functions with respect to 𝛽 and
𝛾 and decreasing functions with respect to 𝜇. 𝜋𝑀2 is a decreasing function
with respect to 𝜃, while 𝜋𝑀1 is a decreasing function with respect to 𝜃 when
𝛾2 𝛾2 𝛾2
4−𝛽 2
<𝜇< 4−2𝛽
and a increasing function when 𝜇 > 4−2𝛽
. When 𝜇 =
𝜋𝑀1 is independent with 𝜃.
Understandably, the increase of alternative products’ price param-
eter and consumers’ low-carbon preferences will directly increase the
market demand for low-carbon products and further promote the in-
crease of low-carbon products’ wholesale price, retail price, and low-
carbon manufacturer’s profit. Due to the positive externalities of R&D,
the traditional manufacturer obtains obvious free-rider benefits, and
thus also realizes the improvement of its profits. However, the increase
of R&D parameter is disadvantageous to the manufacturer 𝑀1 and
𝑀2 because it puts great pressure on manufacturer 𝑀2 , which in
return leads to the decrease of R&D effects and the decrease of both
manufacturers’ profits. Additionally, since the functional relationships
between the retailer’s profit and the parameters are quite complex, it
is not analyzed in detail in this section and will be further analyzed in
the numerical simulation section of this paper.
3.2. Fairness concern
With the development of information, it has become easier for
consumers to obtain information on product performance, which has
led to consumers being more cautious and getting used to comparing
different products when purchasing products (Diao et al., 2022; Li
& Jain, 2016). In our study, traditionally preferred consumers and
low-carbon preferred consumers only buy the corresponding products,
however, due to the interoperability of information, consumers also
know the price of another product and will compare it with their
purchases. Drawing on the research of Yi et al. (2018) and Yu, Wang,
(3−2𝛽 2 )𝛾 2 Feng et al. (2022), we suppose that consumer purchasing utility is
.
affected by the greenness of the product and the price of the product.
Specifically, the utility of traditionally preferred consumers purchasing
a traditional product is 𝑈1 and the utility of low-carbon preferred
consumers for a low-carbon product is 𝑈2 , where 𝑈1 = 𝑣̄ − 𝑃1 and
𝑈2 = 𝑣̄ − 𝑃2 + 𝑔. 𝑣̄ represents the reserved utility, which is assumed
to be large enough. Considering that consumers will compare the pur-
chasing utility of the two products under the information environment,
and combining the existing research on fairness concerns (Jian et al.,
2021; Sarkar & Bhala, 2021; Zhong & Sun, 2022), we assume that
the parameter of consumer’s fairness concern on product utility is 𝜆
(𝜆 ≥ 0). In our study, we just consider the situation where traditional
products and low-carbon products coexist in the market, that is, when
𝜃 −𝑃1∗ +𝛽𝑃2∗ > 𝜆(𝑈2 −𝑈1 ). Equilibrium results under consumers’ fairness
concerns are distinguished in this paper by the superscript *. At this
point, the market demand for the two products respectively are:
𝐷1∗ = 𝜃 −𝑃1∗ +𝛽𝑃2∗ +𝜆(𝑈1 −𝑈2 ), 𝐷2∗ = 1−𝜃 −𝑃2∗ +𝛽𝑃1∗ +𝛾𝑔 ∗ +𝜆(𝑈2 −𝑈1 ). (9)
𝛾2 Obviously, when the purchasing utility of one product is greater
4−2𝛽
, than another, the market demand for this product will increase while
the market demand for the other product will decrease, which is in line
with the economic sense. At this point, the profits of the manufacturers
and the retailer respectively are:
∗ 𝜇𝑔 ∗2 ∗
𝜋𝑀 = 𝑊1∗ 𝐷1∗ , 𝜋𝑀
∗
= 𝑊2∗ 𝐷2∗ − , 𝜋𝑅 = (𝑃1∗ − 𝑊1∗ )𝐷1∗ + (𝑃2∗ − 𝑊2∗ )𝐷2∗ . (10)
1 2 2

5
H. Song et al. Expert Systems With Applications 237 (2024) 121606

(𝛾+𝜆)2 1 𝛾2
Similarly, solve the game in reverse. When 𝜇 > 4(1+𝜆)
, the game of traditional products in the initial state. When 2
< 𝜃 ≤ 1, if 4−𝛽 2
<
equilibrium is: 𝜇 < 𝛾2𝜃
, the wholesale price, retail price, and market demand of
2(2𝜃−1)(2−𝛽)
(𝛾 + 𝜆)[2(1 + 𝜆) − 𝜃(2 − 𝛽 + 𝜆)] low-carbon products are greater than those of traditional products, and if
𝑔∗ = , (11)
𝐶 𝛾2𝜃 𝛾2 𝛾 2 𝜃2
∗ 𝜇 ≥ 2(2𝜃−1)(2−𝛽) , the opposite is true. When 12 < 𝜃 ≤ 1, if 4−𝛽 2 ≤ 4(2𝜃−1) ,
2𝐷1 (1 + 𝜆)[2𝜇(𝛽 − 𝛽𝜃 + 𝜆 + 𝜃𝜆 + 2𝜃) − (𝛾 + 𝜆)(𝛾𝜃 + 𝜆)]
𝑊1∗ = = , (12) whatever value 𝜇 takes, the profit of manufacturer 𝑀1 always is larger
1+𝜆 2𝐶 𝛾2 𝛾 2 𝜃2
2𝐷2∗ than that of 𝑀2 . If 4−𝛽 2 < 4(2𝜃−1) , the profit of manufacturer 𝑀1 is
(1 + 𝜆)𝜇[2(1 + 𝜆) − 𝜃(2 − 𝛽 + 𝜆)]
𝑊2∗ = = , (13) 𝛾 2 𝜃2
1+𝜆 𝐶 larger than that of 𝑀2 when 𝜇 > 4(2𝜃−1)
and the opposite is true when
2 2
−(𝛾 + 𝜆)(𝛾𝜃 + 𝛾)(3 − 2𝛽 − 4𝛽𝜆 + 6𝜆 + 𝜆 ) + 2𝜇𝐴 𝛾2 𝛾 2 𝜃2
𝑃1∗ = , (14) 4−𝛽 2
<𝜇≤ 4(2𝜃−1)
.
2(1 − 𝛽)(1 + 𝛽 + 2𝜆)𝐶
(1 + 𝜆)(𝛽 + 𝜆)(𝛾 + 𝜆)(𝛾𝜃 + 𝛾) + 2𝜇𝐵
𝑃2∗ =− , (15)
2(1 − 𝛽)(1 + 𝛽 + 2𝜆)𝐶
∗ (1 + 𝜆)[2𝜇(𝛽 − 𝛽𝜃 + 𝜆 + 𝜃𝜆 + 2𝜃) − (𝛾 + 𝜆)(𝛾𝜃 + 𝜆)]2
𝜋𝑀 = , (16) It can be seen that when the market share of traditionally preferred
1 2𝐶 2
2 2
𝜇[2(1 + 𝜆) − 𝜃(2 − 𝛽 + 𝜆)] [4𝜇(1 + 𝜆) − (𝛾 + 𝜆) ] consumers is less than half, the wholesale price 𝑊2 , retail price 𝑃2 of
∗
𝜋𝑀 = . (17) low-carbon products, and the profit of manufacturer 𝑀2 are greater
2 2𝐶 2
than those of traditional products in the initial state, which indicates
In the above equation, 𝐴 = 2𝛽 3 (𝜃 − 1) + 3𝛽 2 (𝜆𝜃 − 𝜃 − 2𝜆) + 𝜃(2 + 𝜆)(3 +
that manufacturer 𝑀2 have greater market pricing bargaining power
5𝜆)+𝜆(5+10𝜆+3𝜆2 )−𝛽(𝜆2 −10𝜆−5)+5𝛽𝜃+𝛽𝜃𝜆(16+5𝜆), 𝐵 = 2𝛽 3 𝜃+3𝛽 2 (1−
when the proportion of traditionally preferred consumers is small. At
𝜃+𝜃𝜆+𝜆)+𝜃(2+𝜆)(3+5𝜆)−3(1+𝜆)(2+4𝜆+𝜆2 )+𝛽[6𝜆+𝜆2 −5𝜃−𝜃𝜆(16+5𝜆)],
this point, low-carbon products’ pricing and manufacturer 𝑀2 ’ profit
and 𝐶 = 2𝜇(2 − 𝛽 + 𝜆)(2 + 𝛽 + 3𝜆) − (𝛾 + 𝜆)[2𝛾(1 + 𝜆) + 𝜆(2 − 𝛽 + 𝜆)]. Since the
∗ is too complex, it is not listed in this part and will
will be greater than that of traditional products. On the contrary,
profit function of 𝜋𝑅
when the proportion of traditionally preferred consumers is large, the
be further analyzed in the subsequent numerical simulation section.
optimal pricing of low-carbon products will be higher than traditional
Similar to the initial state, in order to ensure practical economic sig-
products only when 𝜇 is small, i.e., when green R&D is relatively
nificance in the fairness concern section, the conclusions below are ob-
efficient. When 𝜇 is large, the optimal pricing of low-carbon products
tained on the basis that 𝑔 ∗ is positive, i.e. 𝜇 > 𝑚𝑎𝑥
2 (𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)] will be lower than those of traditional products. However, when the
{ (𝛾+𝜆)
4(1+𝜆)
, 2(2−𝛽+𝜆)(2+𝛽+3𝜆)
}. When 𝛽(𝛾 + 𝜆) + 𝜆(𝛾 − 2 − 𝜆) ≥ 0, 𝜇 should proportion of traditionally preferred consumers is high, manufacturer
(𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
satisfy the condition 𝜇 > 2(2−𝛽+𝜆)(2+𝛽+3𝜆)
, and when 𝛽(𝛾 + 𝜆) + 𝜆(𝛾 − 𝑀2 has less pricing power in the market, and its pricing will be greater
(𝛾+𝜆)2 than that of traditional products only when the R&D efficiency is
2 − 𝜆) < 0, 𝜇 should satisfy the condition 𝜇 > 4(1+𝜆)
.
high. When R&D efficiency is low, the optimal pricing is even lower
than that of traditional products, and conducting low-carbon R&D for
Proposition 4. 𝑔 ∗ , 𝑊2∗ , and 𝐷2∗ are increasing functions with respect
manufacturer 𝑀2 is uneconomical at this time. Therefore, in a market
to 𝛾 and decreasing functions with respect to 𝜇 and 𝜃. The functional
of mostly traditionally preferred consumers, it is not a good choice for
relationships between 𝑊1∗ , 𝐷1∗ and 𝛾, 𝜇, 𝜃 are related to the size relationship
manufacturers to invest in low-carbon R&D when green R&D efficiency
between 4𝛽𝛾𝜇 − 4𝜇𝜆(1 − 𝛽 − 𝛾) − 𝜆(𝛾 + 𝜆)2 , 𝛽(𝛾 + 𝜆) + 𝜆(𝛾 − 2 − 𝜆),
is relatively low.
2𝜇(2 − 𝛽 + 𝛾) − 𝛾(𝛾 + 𝜆) and 0, respectively.

Similar to Proposition 1, in the case of consumers being fairness- Proposition 6. When 0 ≤ 𝜃 ≤ 21 , the wholesale price, retail price, and
concerned, low-carbon products’ greenness, wholesale price, and mar- market demand of low-carbon products are larger than those of traditional
ket demand increase with the increase of alternative products’ price products under consumers’ fairness concerns. When 12 < 𝜃 ≤ 1, if
(𝛾+𝜆)(𝛾𝜃+𝜆) 2
parameter and decrease with the increase of R&D parameter and the
2(2𝜃−1)(2−𝛽+𝜆)
≤ 𝑚𝑎𝑥{ (𝛾+𝜆)
4(1+𝜆)
, (𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
2(2−𝛽+𝜆)(2+𝛽+3𝜆)
}, the wholesale price,
proportion of traditionally preferred consumers. Differently, in the case
retail price, and market demand of low-carbon products are smaller than
of consumer’s fairness concern, the functional relationships between (𝛾+𝜆)(𝛾𝜃+𝜆) 2
those of traditional products; if 2(2𝜃−1)(2−𝛽+𝜆) > 𝑚𝑎𝑥{ (𝛾+𝜆) ,
the wholesale price, market demand of traditional products and 𝛾, 𝜃, 4(1+𝜆)
2
(𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
𝜇 are more complex. When 4𝛽𝛾𝜇 − 4𝜇𝜆(1 − 𝛽 − 𝛾) − 𝜆(𝛾 + 𝜆)2 = 0, 𝑊1∗ 2(2−𝛽+𝜆)(2+𝛽+3𝜆)
}, at this point, when 𝑚𝑎𝑥{ (𝛾+𝜆)
4(1+𝜆)
,
is independent with 𝛾. 𝑊1∗ is an increasing function with respect to (𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
} < 𝜇 < (𝛾+𝜆)(𝛾𝜃+𝜆)
, the wholesale price, retail
𝛾 when 4𝛽𝛾𝜇 − 4𝜇𝜆(1 − 𝛽 − 𝛾) − 𝜆(𝛾 + 𝜆)2 > 0 and vice versa. When 2(2−𝛽+𝜆)(2+𝛽+3𝜆) 2(2𝜃−1)(2−𝛽+𝜆)
price, and market demand of low-carbon products are larger than those of
𝛽(𝛾 +𝜆)+𝜆(𝛾 −2−𝜆) = 0, 𝑊1∗ is independent with 𝜇. 𝑊1∗ is an increasing (𝛾+𝜆)(𝛾𝜃+𝜆)
traditional products, and the opposite is true when 𝜇 ≥ 2(2𝜃−1)(2−𝛽+𝜆) .
function with respect to 𝜇 when 𝛽(𝛾 +𝜆)+𝜆(𝛾 −2−𝜆) < 0 and vice versa.
When 2𝜇(2 − 𝛽 + 𝛾) − 𝛾(𝛾 + 𝜆) = 0, 𝑊1∗ is independent with 𝜃. 𝑊1∗ is an
increasing function with respect to 𝜇 when 2𝜇(2 − 𝛽 + 𝛾) − 𝛾(𝛾 + 𝜆) > 0
and vice versa. Since the functions of 𝑔 ∗ , 𝑊1∗ , and 𝑊2∗ with respect to 𝛽
and 𝜆 are more complex, as well as the relationships between product Similar to the conclusions in Proposition 5, the wholesale price,
retail prices and profits with the parameters, we will further analyze retail price, and market demand of low-carbon products are also larger
their relationships in the numerical simulations. than those of traditional products under consumers’ fairness concerns
when the proportion of traditionally preferred consumers is less than
4. Comparative analysis half. It can be seen that consumers’ fairness concerns only affect the
values of the wholesale price, retail price, and profits of traditional and
Based on the equilibrium results of the game under the initial low carbon products while do not affect the size relationship between
state and consumers’ fairness concerns, our study further compares the them. Only when the proportion of traditionally preferred consumers
differences between the wholesale price, retail price, market demand, is more than half, consumers’ fairness concerns will have significant
and profits of manufacturers in the initial state and consumers’ fairness effects on the size relationship between these equilibrium results. Since
concern and obtains the following propositions. the expression of the functions under consumers’ fairness concerns is
relatively complex, we will further compare the relationship between
Proposition 5. When 0 ≤ 𝜃 ≤ 21 , the wholesale price, retail price, the magnitude of these equilibrium results in the numerical simulation
market demand, and profit of low-carbon products are larger than those section.

6
H. Song et al.
Fig. 1. Relationship between wholesale price, retail price and 𝜇, 𝜃.
5. Numerical simulation
5.1. Initial state
In this section, our study analyzes the functional relationship be-
tween parameters and the game equilibrium results through numerical
simulation, aiming to explore the mechanism of parameters’ influence
on the equilibrium results. Since there is an obvious linear relationship
between the market demand and the wholesale price, only the func-
tional relationships between the wholesale price and parameters are
analyzed in the subsequent analysis. In addition, since the equilibrium
results are basically monotonically increasing functions with respect to
the parameters 𝛽, and 𝛾, this paper does not make separate images
of the relationship between the parameters 𝛽, 𝛾 and the equilibrium
results in the numerical simulation section. In this part, we focus on
the effects of parameters 𝜇 and 𝜃 on the equilibrium results. Suppose
that 𝛽 = 0.6, 𝛾 = 1, 𝜃1 = 0.4, 𝜃2 = 0.6, and 0.4 ≤ 𝜇 ≤ 1.6. Thereby, we
can obtain the relations between the wholesale price, retail price, and
𝜇, 𝜃, which are drawn in Fig. 1.
Fig. 1(a) and (b) depict the wholesale and retail prices as a function
of parameters 𝜇 and 𝜃. Overall, the wholesale and retail prices of both
traditional and low-carbon products decrease as 𝜇 increases, which
is consistent with the conclusion of Propositions 1 and 2. Detailedly,
when 𝜃 is smaller, the change in 𝜇 affects the equilibrium outcome
to a greater extent. Additionally, the change in 𝜇 has a greater effect
on the wholesale and retail price of low-carbon products than those of
traditional products. It is easy to understand that manufacturer 𝑀2 , as a
participant in green R&D investment, is directly benefited from its R&D
efficiency. Hence, 𝜇 usually has a greater impact on manufacturer 𝑀2
than manufacturer 𝑀1 . When 𝜇 is large, it indicates that manufacturer
𝑀2 is inefficient in green R&D, which in turn leads to low product
greenness in equilibrium. At this point, manufacturer 𝑀2 has to reduce
its wholesale price to increase its competitiveness in the market. As a
result, manufacturer 𝑀1 will also reduce its wholesale price to compete
with manufacturer 𝑀2 , which will further lead to a lower retail price
of these two products.
Specifically, from Fig. 1(a) and (b), we can see that when 𝜃 = 0.4,
no matter how 𝜇 changes, the wholesale and retail price of low-carbon
products are always greater than those of traditional products, while
when 𝜃 = 0.6, the situation is quite different. At this point, when 𝜇
is small, the wholesale and retail prices of low-carbon products are
greater than the corresponding results of traditional products, while
when 𝜇 is large, the conclusion is just the opposite. This is because
manufacturer 𝑀2 has great pricing power when the proportion of
traditionally preferred consumers is small, which will inevitably lead
it to increase its wholesale price to cover its investment in R&D costs.
7
Expert Systems With Applications 237 (2024) 121606
This in turn leads to the retail price of low-carbon products also being
greater than the retail price of traditional products. However, when
traditionally preferred consumers dominate the market, the pricing
power of manufacturer 𝑀2 is greatly reduced, and its market pricing
power is greater than that of manufacturer 𝑀1 only when its R&D
efficiency is quite high.
Fig. 2(a) and (b) describe the relationships between the channel
participants’ profits and 𝜇, 𝜃. Obviously, the profits of supply chain
participants decrease with the increase of 𝜇, which is consistent with
the conclusion of Proposition 3. Low R&D efficiency is detrimental
to the profits of the entire supply chain participants. Similar to the
conclusions of Fig. 1, it can be seen that when 𝜃 = 0.4, no matter
how 𝜇 changes, the profit of the manufacturer 𝑀2 is always larger than
the profit of the manufacturer 𝑀1 . And when 𝜃 = 0.6, the situation is
different. At this point, When is 𝜇 small, the profit of manufacturer
𝑀2 is larger than that of manufacturer 𝑀1 , and when 𝜇 is large, the
conclusion is just the opposite.
5.2. Fairness concern
In this section, we discuss the effects of parameters on the equi-
librium outcomes in the case where consumers are fairness-concerned
about the product utility. Given the complexity of the functional ex-
pressions for the equilibrium outcome under fairness concerns, coupled
with the main research objective of our study, we only focus on the
impacts of parameters 𝜃, 𝜇, and 𝜆 on the equilibrium outcomes in this
section. In addition, the impact of the presence of consumers’ fairness
concerns on the equilibrium outcomes will be discussed in detail, as
well as the differences in the degree of parameters’ influence on the
equilibrium outcomes will also be analyzed in depth. We assume that
𝛽 = 0.6, 𝛾 = 0.8, 𝜃1 = 0.4, 𝜃2 = 0.6, 0.6 ≤ 𝜇 ≤ 1.2, and 0 ≤ 𝜆 ≤ 0.5 and
obtain the relationships between parameters and equilibrium outcomes,
which is shown in Figs. 3–7.
5.2.1. Relationships between 𝑔 ∗ and 𝜃, 𝜇, 𝜆
From Fig. 3, we can find that the greenness 𝑔 ∗ of low-carbon
products at 𝜃 = 0.4 is always larger than that at 𝜃 = 0.6. This indicates
that when low-carbon preferred consumers make up the majority of
the market, manufacturer 𝑀2 faces a larger potential demand and has
greater pricing power in the market than those of manufacturer 𝑀1 ,
which causes manufacturer 𝑀2 to invest more in green R&D and thus
enhance the greenness of low-carbon products. Compared with the ini-
tial status, it is obvious that consumers’ fairness concerns on products’
utility are beneficial for manufacturer 𝑀2 and the smaller 𝜇 is, the more
favorable it is for 𝑔 ∗ . Specifically, 𝑔 ∗ achieves its maximum value at
𝜇 = 0.6 and 𝜆 = 0.5. In addition, Fig. 3 also shows that 𝑔 ∗ decreases
H. Song et al.
Fig. 2. Relationship between profit and 𝜇, 𝜃.
Fig. 3. Impacts of 𝜃, 𝜇, and 𝜆 on the greenness.
with the increase of 𝜇 and increases with the increase of 𝜆, and the
effect of 𝜇 on 𝑔 ∗ is larger than that of 𝜆. Understandably, consumers’
fairness concerns indirectly affect manufacturer 𝑀2 ’s R&D investment
by influencing consumers’ market demand, while R&D efficiency is the
direct factor that is key to enhancing products’ greenness.
5.2.2. Relationships between 𝑊 ∗ and 𝜃, 𝜇, 𝜆
As can be seen from Fig. 4(a) and (b), the wholesale price of
manufacturer 𝑀2 is always greater than that of manufacturer 𝑀1 when
𝜃 = 0.4, while the relationship between the size of the wholesale prices
of manufacturer 𝑀1 and 𝑀2 is uncertain when 𝜃 = 0.6. As is shown in
Fig. 4(a), the gap between 𝑊1∗ and 𝑊2∗ is smallest when 𝜇 = 1.2 and
𝜆 = 0 and largest when 𝜇 = 0.6 and 𝜆 = 0.5. From Fig. 4(b), it can be
seen that the wholesale price of manufacturer 𝑀2 is greater than that
of manufacturer 𝑀1 for most of the range of values of the parameter
𝜇 and 𝜆, except when 𝜇 is relatively large and 𝜆 is relatively small.
The conclusions are similar to those in Fig. 1(a) when consumers are
fairness-concerned about the product’s utility. When 𝜃 = 0.4, i.e. when
low-carbon preferred consumers are in the majority, manufacturer 𝑀2
has greater market pricing power than manufacturer 𝑀1 and is always
pricing higher than manufacturer 𝑀1 . However, when traditionally
preferred consumers are in the majority, the pricing market power of
manufacturer 𝑀2 sharply reduces and the wholesale price of manufac-
turer 𝑀2 will even be smaller than that of manufacturer 𝑀1 in the case
where 𝜇 is large and 𝜆 is small. Additionally, according to Fig. 4(a) and
(b), we can conclude that the wholesale price of manufacturer 𝑀2 is
much more affected by 𝜆 than that of manufacturer 𝑀1 . Specifically,
8
Expert Systems With Applications 237 (2024) 121606
𝑊2∗ is clearly decreasing with the increase of 𝜆 while 𝑊1∗ is slightly
increasing with the increase of 𝜆, which means the presence of fairness
concerns is disadvantageous for the pricing of manufacturer 𝑀2 while
advantageous for manufacturer 𝑀1 .
5.2.3. Relationships between 𝑃 ∗ and 𝜃, 𝜇, 𝜆
Similar to the conclusions in Fig. 4, from Fig. 5(a) and (b), we can
obtain that the retail price of low-carbon products is always higher than
that of traditional products when 𝜃 = 0.4 while the size of the retail
prices of traditional products and low-carbon products is uncertain
when 𝜃 = 0.6. However, there are some conclusions that are not quite
the same as the conclusions in Fig. 4. As is shown in Fig. 5, the retail
price of traditional products is slightly increasing with the increase of 𝜆
which is different from the conclusions in its wholesale price. Although
the gap between 𝑃1∗ and 𝑃2∗ and the gap between 𝑊1∗ and 𝑊2∗ both take
their maximum values when 𝜇 = 0.6 and 𝜆 = 0.5, the gap between 𝑃1∗
and 𝑃2∗ takes the minimum value when 𝜇 = 0.6 and 𝜆 = 0, which is
quite different from the result in Fig. 4. In addition, compared with the
impact of 𝜆 on the wholesale price, the impact of 𝜆 on the retail price
is greater, especially at 𝜃 = 0.6, which suggests that consumers’ fairness
concerns play a more significant role in the pricing of both products for
retailer 𝑅.
Compared with Fig. 4(b), we can see that in the same range of values
for 𝜇 and 𝜆, the area where the retail price of traditional products is
higher than that of low-carbon products is larger than the area where
the wholesale price of traditional products is higher than that of low-
carbon products. In the initial state, 𝜇 respectively takes the same value
when the wholesale and retail prices of traditional and low-carbon
products are equal. Nevertheless, under the circumstance of consumers’
fairness concerns, the range of 𝜇 is larger when their retail prices are
equal than that when their wholesale prices are equal. It is not difficult
to understand that consumers are not only concerned about the utility
they get from the products in this situation but also about the utility
gap between the products. Furthermore, since the retail price of the
products directly affects the utility of the product, while the wholesale
price indirectly affects the wholesale price of the product, it is easier to
explain the more pronounced effect of fairness concerns on the retail
price than the wholesale price.
∗ and 𝜃, 𝜇, 𝜆
5.2.4. Relationships between 𝜋𝑀
Similarly, as is shown in Fig. 6, the profit of manufacturer 𝑀2
is always larger than that of manufacturer 𝑀1 when 𝜃 = 0.4, while
the size of the profits of manufacturer 𝑀1 and manufacturer 𝑀2 is
uncertain. From Fig. 6(a), we can discover that the impact of 𝜆 on
∗
the 𝜋𝑀1 is larger than that of 𝜇 while 𝜋𝑀2∗ is more affected by 𝜇.
H. Song et al. Expert Systems With Applications 237 (2024) 121606

Fig. 4. Impacts of 𝜃, 𝜇, and 𝜆 on the wholesale price.

Fig. 5. Impacts of 𝜃, 𝜇, and 𝜆 on the retail price.

Fig. 6. Impacts of 𝜃, 𝜇, and 𝜆 on the manufacturers’ profits.

Moreover, the gap between the profits of manufacturer 𝑀1 and man-
ufacturer 𝑀2 takes the maximum value when 𝜇 = 0.6 and 𝜆 = 0.5.
Understandably, consumers’ fairness concerns are more likely to affect
product demands, which has a greater impact on manufacturer 𝑀1 . In
contrast, for manufacturer 𝑀2 , reducing R&D costs is a more critical
factor for its profitability, and thus changes in R&D parameter have a
greater impact on its profitability. From Fig. 6(b), we can obtain that
∗
𝜋𝑀1 ∗
and 𝜋𝑀2 both take the maximum value when 𝜇 = 0.6, and the
difference is that 𝜋𝑀1 ∗ takes the maximum value when 𝜆 = 0 while
∗
𝜋𝑀1 takes the maximum value when 𝜆 = 0.5. It can be seen that the
improvement in R&D efficiency not only helps to boost the profit of
𝑀2 but also the profit of 𝑀1 , which implies that there is a clear free-
rider effect for the traditional manufacturer. The increase in consumers’
fairness concerns about product utility increases the market demand of
manufacturer 𝑀2 while decreasing that of manufacturer 𝑀1 , which in
turn leads to a decrease in manufacturer 𝑀2 ’s profits and an increase
in manufacturer 𝑀1 ’s profits. Additionally, compared to the wholesale
prices in Fig. 4(b), it is obvious that although manufacturer 𝑀2 has a
higher wholesale price than manufacturer 𝑀1 , manufacturer 𝑀2 also
needs to bear the cost of R&D investment. Therefore, only when the
R&D of manufacturer 𝑀2 is more efficient and consumers’ fairness
concerns are stronger can it reap greater profits than manufacturer 𝑀1 .
∗ and 𝜃, 𝜇, 𝜆
5.2.5. Relationships between 𝜋𝑅
From Fig. 7, we can clearly see that the profit of retailer 𝑅 at
𝜃 = 0.6 is always larger than that at 𝜃 = 0.4, which demonstrates that
retail 𝑅 can earn more when low-carbon preferred consumers are in
the majority of the market. Additionally, it is obvious that when 𝜇 is

9
H. Song et al.
Fig. 7. Impacts of 𝜃, 𝜇, and 𝜆 on the retailer’s profit.
relatively large, the influence of 𝜆 on the profit of retailer 𝑅 is not
significant, however, when 𝜇 is relatively small, the profit of retailer
𝑅 sharply decreases with the increase of 𝜆. When consumers’ fairness
concern parameter is small and R&D efficiency is high, the profit of
retailer 𝑅 will be quite large. This is because a small consumers’ fairness
concern parameter allows retailer 𝑅 to differentiate the retail prices
of traditional products and low-carbon products based on consumer
preferences, which in turn leads to an increase in its profits. The
increase in R&D efficiency of manufacturer 𝑀2 helps other participants
throughout the supply chain, and thus also leads to an increase in the
profit of retailer 𝑅.
6. Conclusions and management insights
Considering the realistic situation that consumers are fairness-
concerned about products’ purchasing utilities, we construct a two-
echelon supply chain consisting of two competing manufacturers and
one retailer, where manufacturers are the leaders in the decision-
making sequence. Based on consumers’ utility differentiation of pur-
chasing products in the real environment, our study creatively incorpo-
rates consumers’ fairness concern as a significant parameter in the game
model and discusses its impact on supply chain participants’ decisions.
In our study, consumers in the market are divided into traditionally pre-
ferred consumers and low-carbon preferred consumers. Then, we solve
the game equilibrium under the initial state and consumers’ fairness
concerns, respectively. Moreover, the impacts of the parameters on the
equilibrium results are carefully discussed and a comparative analysis
of the equilibrium results is also deeply dissected.
6.1. Conclusions
Based on the above study, we have obtained some interesting
conclusions.
(i) In the initial state, the increase in consumers’ low-carbon prefer-
ence contributes to the increase in wholesale prices, retail prices, and
profits for manufacturers and retailers, while the increase in the low-
carbon manufacturer’s R&D parameter leads to the opposite results.
Different from the monotonic relationships between the two param-
eters above and the game equilibrium, although an increase in the
market share of traditionally preferred consumers leads to a significant
decrease in the wholesale price, retail price, and profit of low-carbon
products, it does not necessarily lead to an increase in corresponding
results of traditional products, because the impacts of the traditionally
preferred consumers’ market proportion on the equilibrium are also
influenced by the magnitude of the low-carbon manufacturer’s R&D
efficiency. Additionally, there is a significant free-rider effect of the
10
Expert Systems With Applications 237 (2024) 121606
low-carbon manufacturer’s R&D efficiency and consumers’ low-carbon
preferences on the traditional manufacturer’s and retailer’s profits.
(ii) In both markets with a majority of traditionally preferred con-
sumers and a majority of low-carbon preference consumers, consumers’
fairness concerns about products’ utility can lead to an increase in
products’ greenness and a decrease in the retailer’s profit, while its
impacts on products’ pricing and manufacturers’ profitability are also
influenced by other factors. Specifically, consumer fairness concern has
a greater impact on low-carbon products’ pricing, which fall signifi-
cantly with the increase of consumers’ fairness concerns in both market
scenarios, while it has little impact on traditional products’ pricing. The
traditional manufacturer’s profit declines with the increase of consumer
fairness concerns in both scenarios. The low-carbon manufacturer’s
profit decreases with an increase in consumer fairness concerns when
its R&D investment is inefficient. And when its R&D is quite effective,
the increase of consumer fairness concern will have little effect in
markets dominated by traditionally preferred consumers and result
in the increase of the low-carbon manufacturer’s profit in markets
dominated by low-carbon consumers.
(iii) In a situation where low-carbon consumers are in the majority,
it would be advantageous for low-carbon manufacturers to invest in
green R&D, irrespective of fairness concerns on the part of the con-
sumers, because the wholesale price, retail price and market demand
of low-carbon products would be greater than that of conventional
products, which would result in the greater profit of the low-carbon
manufacturer than that of the traditional manufacturer. While in a
market dominated by traditional consumers, although the low-carbon
manufacturer’s wholesale price and demand may be larger than the
traditional manufacturer’s, its profit is not necessarily larger than the
traditional manufacturer’s since it needs to bear R&D investments
separately. At this point, only when R&D is relatively efficient and
consumers’ fairness concerns are relatively strong will the low-carbon
manufacturer earn more profits than the traditional manufacturer and
only in this situation it is favorable for it to conduct low-carbon
investments.
6.2. Management insights
The existence of consumers’ fairness concerns has non-negligible
impacts on supply chain participants’ decisions, while the degree of
the impacts also depends on consumers’ low-carbon preferences, the
market distribution of consumers, and the low-carbon manufacturer’s
R&D efficiency. In view of the fact that consumers’ concern about
fairness is a common phenomenon in real life, combined with the above
research conclusions, we put forward some implications for the core
enterprises of the supply chain.
(i) Traditional manufacturers should take the initiative to promote
their products decarbonization transformation. Low-carbon develop-
ment is the general trend. With the passage of time, traditionally
preferred consumers may gradually shift to low-carbon preferred con-
sumers, and the increase in the market proportion of low-carbon pref-
erence consumers will lead to a large shrinkage in profits for traditional
manufacturers. The advance of low-carbon transformation and upgrad-
ing of traditional manufacturers helps them to improve their market
competitiveness as well as avoid being eliminated in the fierce market
competition.
(ii) Low-carbon manufacturers should determine whether to invest
in R&D based on their low-carbon R&D efficiency as well as the market
distribution and behavioral preferences of consumers. In markets where
low-carbon consumers predominate and consumers’ low-carbon prefer-
ences are relatively high, low-carbon manufacturers will be under less
pressure to conduct low-carbon R&D and their benefits from R&D will
be more evident. Conversely, when traditionally preferred consumers
account for the majority and consumer preferences for low-carbon
H. Song et al. Expert Systems With Applications 237 (2024) 121606

products are not strong, low-carbon manufacturers will be under signif- 𝑔, 𝑊1 , and 𝑊2 into Eqs. (1) and (2), we can obtain that the game
icant pressure and it would be unwise to invest heavily in low-carbon 𝛾(2−2𝜃+𝛽𝜃) 𝜃(4𝜇−𝛾 2 )+2𝛽𝜇(1−𝜃)
equilibrium is: 𝑔 = 2(4𝜇−𝛽 2 𝜇−𝛾 2 ) , 𝑊1 = 2𝐷1 = 2(4𝜇−𝛽 2 𝜇−𝛾 2 )
, 𝑊2 =
capital at this time. (2−2𝜃+𝛽𝜃)𝜇 2 2 2 )+𝛽𝜃(1+2𝛽)(2𝛽−5)]
2𝐷2 = 4𝜇−𝛽 2 𝜇−𝛾 2
, 𝑃1 = (2𝛽 −3)𝛾 𝜃+2𝜇[6𝜃+𝛽(5−2𝛽
4(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )
, 𝑃2 =
(iii) Supply chain participants need to remain attentive to con-
2𝜇[6−6𝜃+5𝛽𝜃+𝛽 2 (3𝜃−2𝛽𝜃−3)]−𝛽𝛾 2 𝜃 [𝜃(4𝜇−𝛾 2 )+2𝛽𝜇(1−𝜃)]2
sumers’ fairness concerns. For traditional manufacturers, consumers’ 4(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )
, 𝜋 𝑀1 = 8(4𝜇−𝛽 2 𝜇−𝛾 2 )2
, 𝜋𝑀2 =
fairness concerns can be detrimental by reducing their market demand, 𝜇(4𝜇−𝛾 2 )(2−2𝜃+𝛽𝜃)2
2
8(4𝜇−𝛽 𝜇−𝛾 ) 2 , and 𝜋 𝑅 =
which may decrease their profits. In contrast, low-carbon manufactur- 4𝜇2 [2𝜃(2−𝛽)2 (𝛽−1)(𝜃−1)−4−5𝛽 2 ]+4𝛾 2 𝜃𝜇[3𝛽+(2−𝛽)(1−𝛽)𝜃]−𝛾 4 𝜃 2
ers benefit from consumers’ fairness concerns. At this point, low-carbon 16(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )
.
manufacturers should increase the introduction of high-level talents Calculation process of Eqs. (11)–(17)
and actively promote the innovation of low-carbon products so as to The calculation process is similar to that of Eqs. (3)–(8). Firstly,
obtain greater benefits. Additionally, as consumers are concerned about we can obtain the Hessian matrix of 𝜋𝑅 ∗ with respect to 𝑃 ∗ and 𝑃 ∗
the utility differences between products, it will lead to a reduction ( ) 1 2
−2 − 2𝜆 2𝛽 + 2𝜆
in the retailer’s ability to differentiate pricing between traditional is . Since 𝛽 < 1, the Hessian matrix is negative
2𝛽 + 2𝜆 −2 − 2𝜆
products and low-carbon products. The excessive price gap between ∗ with respect to
definite and there is an extreme value solution of 𝜋𝑅
∗
low-carbon products and traditional products is detrimental to retailers’ 𝛽+𝜃−𝛽𝜃+𝜆+𝑔 ∗ [𝛽𝛾+𝜆(𝛽+𝛾−1)] 𝑊
𝑃1∗ and 𝑃2∗ . Then we can obtain that 𝑃1∗ = 2(1−𝛽)(1+𝛽+2𝜆)
+ 21
long-term development. ∗ (𝛾+𝜆+𝛾𝜆−𝛽𝛾) 𝑊∗
(iv) Low-carbon manufacturers and traditional manufacturers and 𝑃2∗ = 1−𝜃+𝛽𝜃+𝜆+𝑔 + 22 . Substituting them into 𝜋𝑀 ∗ , the
2(1−𝛽)(1+𝛽+2𝜆) ( 2 )
should promote R&D collaboration to accelerate the decarbonization 𝛾+𝜆
Hessian matrix of 𝜋𝑀∗ with respect to 𝑊 ∗ and 𝑔 ∗ is −(1 + 𝜆) 2 .
and upgrading of the entire supply chain. Given that the increase in 2 2 𝛾+𝜆
−𝜇
2
consumers’ low-carbon preferences and improvement of R&D tech- 2
Hence, when 𝜇 > (𝛾+𝜆) , the Hessian matrix is negative definite. At
nology efficiency is beneficial to both low-carbon manufacturers and ∗
4(1+𝜆)
∗ ∗
𝜕𝜋𝑀1 𝜕𝜋𝑀2 𝜕𝜋𝑀2
traditional manufacturers, low-carbon manufacturers bear R&D expen- this point, let 𝜕𝑊1∗
= 0,
𝜕𝑊2∗
= 0, and
𝜕𝑔 ∗
= 0, we can obtain
ditures alone tends to result in extremely fierce competition, which is (𝛾+𝜆)[2(1+𝜆)−𝜃(2−𝛽+𝜆)] ∗ (1+𝜆)[2𝜇(𝛽−𝛽𝜃+𝜆+𝜃𝜆+2𝜃)−(𝛾+𝜆)(𝛾𝜃+𝜆)]
that 𝑔∗= 𝐶
, 𝑊1 = 2𝐶
,
disadvantageous to both sides. Therefore, low-carbon manufacturers
and traditional manufacturers should sign cooperative contracts to and 𝑊2∗ = (1+𝜆)𝜇[2(1+𝜆)−𝜃(2−𝛽+𝜆)]
𝐶
, where 𝐶 = 2𝜇(2 − 𝛽 + 𝜆)(2 + 𝛽 + 3𝜆) −
enhance R&D investment in low-carbon technologies, with a view to (𝛾 + 𝜆)[2𝛾(1 + 𝜆) + 𝜆(2 − 𝛽 + 𝜆)]. Finally, substituting 𝑔 ∗ , 𝑊1∗ , and 𝑊2∗
achieving a win-win situation for both sides while further promoting into Eqs. (9) and (10), we can obtain that the game equilibrium is:
2𝐷∗
the low-carbon upgrade of the industrial chain. 𝑔 ∗ = (𝛾+𝜆)[2(1+𝜆)−𝜃(2−𝛽+𝜆)]
𝐶
, 𝑊1∗ = 1+𝜆1 = (1+𝜆)[2𝜇(𝛽−𝛽𝜃+𝜆+𝜃𝜆+2𝜃)−(𝛾+𝜆)(𝛾𝜃+𝜆)]
2𝐶
,
2𝐷2∗ 2 −4𝛽𝜆+6𝜆+𝜆2 )+2𝜇𝐴
𝑊2∗ = 1+𝜆
= (1+𝜆)𝜇[2(1+𝜆)−𝜃(2−𝛽+𝜆)]
𝐶
, 𝑃1∗ = −(𝛾+𝜆)(𝛾𝜃+𝛾)(3−2𝛽
2(1−𝛽)(1+𝛽+2𝜆)𝐶
,
CRediT authorship contribution statement
(1+𝜆)[2𝜇(𝛽−𝛽𝜃+𝜆+𝜃𝜆+2𝜃)−(𝛾+𝜆)(𝛾𝜃+𝜆)]2
𝑃2∗ = − (1+𝜆)(𝛽+𝜆)(𝛾+𝜆)(𝛾𝜃+𝛾)+2𝜇𝐵
2(1−𝛽)(1+𝛽+2𝜆)𝐶
, 𝜋 ∗
𝑀1
= 2𝐶 2
,
Haohao Song: Methodology, Software, Writing – original draft. ∗ 𝜇[2(1+𝜆)−𝜃(2−𝛽+𝜆)]2 [4𝜇(1+𝜆)−(𝛾+𝜆)2 ]
and 𝜋𝑀 = 2𝐶 2
. In the above equation, 𝐴 =
2
Ying Wang: Conceptualization, Writing – reviewing & editing. Xi- 2𝛽 3 (𝜃 − 1) + 3𝛽 2 (𝜆𝜃 − 𝜃 − 2𝜆) + 𝜃(2 + 𝜆)(3 + 5𝜆) + 𝜆(5 + 10𝜆 + 3𝜆2 ) − 𝛽(𝜆2 −
angyu Mao: Methodology, Software, Investigation. Chunyang Wang: 10𝜆 − 5) + 5𝛽𝜃 + 𝛽𝜃𝜆(16 + 5𝜆), 𝐵 = 2𝛽 3 𝜃 + 3𝛽 2 (1 − 𝜃 + 𝜃𝜆 + 𝜆) + 𝜃(2 +
Project administration, Funding acquisition. 𝜆)(3 + 5𝜆) − 3(1 + 𝜆)(2 + 4𝜆 + 𝜆2 ) + 𝛽[6𝜆 + 𝜆2 − 5𝜃 − 𝜃𝜆(16 + 5𝜆)], and
𝐶 = 2𝜇(2 − 𝛽 + 𝜆)(2 + 𝛽 + 3𝜆) − (𝛾 + 𝜆)[2𝛾(1 + 𝜆) + 𝜆(2 − 𝛽 + 𝜆)].
Declaration of competing interest

Appendix B. Proofs of propositions

We declare that we have no financial or personal relationships with
other people or organizations that can inappropriately influence our
work. There is no professional or other personal interest of any nature
or kind in any product, service, or company that could be construed as Proof of Proposition 1. Since 𝑊1 and 𝑊2 are separately twice as
influencing the position presented in, or the review of, the manuscript large as 𝐷1 and 𝐷2 , we just discuss the relationship between 𝑊1 and
entitled. 𝑊2 with each parameter in this part. Taking partial derivatives of 𝑔,
𝑊1 , and 𝑊2 with respect to 𝛾, 𝜃 and 𝜇 separately, we can obtain that
2 𝜃]𝛾𝜇−𝛾 3 𝜃 2 𝜇−𝛾 2 )(2−2𝜃+𝛽𝜃)
Data availability
𝜕𝑔
𝜕𝛽
= [4𝛽(1−𝜃)+4𝜃+𝛽
2(4𝜇−𝛽 2 𝜇−𝛾 2 )2
, 𝜕𝑔
𝜕𝛾
= (4𝜇−𝛽
2(4𝜇−𝛽 2 𝜇−𝛾 2 )2
, 𝜕𝑔
𝜕𝜃
(𝛽−2)𝛾
= 2(4𝜇−𝛽 2 𝜇−𝛾 2 ) ,
2 )(2−2𝜃+𝛽𝜃)𝛾 𝜕𝑊 2 2 (1−𝜃+𝛽𝜃)] 𝜕𝑊
and 𝜕𝑔
𝜕𝜇
= − (4−𝛽
2(4𝜇−𝛽 2 𝜇−𝛾 2 )2
; 𝜕𝛽1 = 𝜇[𝜇(4+𝛽 )(1−𝜃)+16𝛽𝜃𝜇−𝛾
(4𝜇−𝛽 2 𝜇−𝛾 2 )2
, 𝜕𝛾1 =
Data will be made available on request. 𝛽𝛾𝜇(2−2𝜃+𝛽𝜃) 𝜕𝑊 2(2−𝛽)𝜇−𝛾 2 𝜕𝑊1 (2−2𝜃+𝛽𝜃)𝛽𝛾 2 𝜕𝑊2
2(4𝜇−𝛽 2 𝜇−𝛾 2 )2
, 𝜕𝜃1 = 2(4𝜇−𝛽 2 𝜇−𝛾 2 ) , and 𝜕𝜇
= − 2(4𝜇−𝛽 2 𝜇−𝛾 2 )2 ; 𝜕𝛽
=
[4𝛽(1−𝜃)+4𝜃+𝛽 2 𝜃]𝜇2 −𝛾 2 𝜃𝜇 𝜕𝑊2 2𝛾𝜇(2−2𝜃+𝛽𝜃) 𝜕𝑊2 (𝛽−2)𝛾 𝜕𝑊2
Appendix A. Calculation processes of equations (4𝜇−𝛽 2 𝜇−𝛾 2 )2
, 𝜕𝛾
= (4𝜇−𝛽 2 𝜇−𝛾 2 )2
, 𝜕𝜃
= 4𝜇−𝛽 2 𝜇−𝛾 2
, and 𝜕𝜇
=
(2−2𝜃+𝛽𝜃)𝛾 2 𝛾2 𝜕𝑔 𝜕𝑔
− (4𝜇−𝛽 2 𝜇−𝛾 2 )2 . Since 𝜇 > 4−𝛽 2 , it is obvious that 𝜕𝛾 > 0, 𝜕𝜃 < 0, and
Calculation process of Eqs. (3)–(8) 𝜕𝑔 𝜕𝑊 𝜕𝑊 𝜕𝑊 𝜕𝑊 𝜕𝑊
< 0; 𝜕𝛾1 > 0 and 𝜕𝜇1 < 0; 𝜕𝛾2 > 0, 𝜕𝜃2 < 0, and 𝜕𝜇2 < 0. In
Solve the game in reverse. Firstly,
( we can) obtain the Hessian matrix
𝜕𝜇
𝛾2 2 𝛽2𝛾2𝜃 𝜕𝑔
−2 2𝛽 addition, since 𝜇 > 4−𝛽 2 , we can get 4𝜃𝜇 − 𝛾 = 4−𝛽 2 > 0 thus 𝜕𝛽 > 0
of 𝜋𝑅 with respect to 𝑃1 and 𝑃2 is . Since the Hessian matrix
2𝛽 −2 𝜕𝑊2
and 𝜕𝛽 > 0. Similarly, since 𝜇(4 + 𝛽 2 )(1 − 𝜃) + 16𝛽𝜃𝜇 − 𝛾 2 (1 − 𝜃 + 𝛽𝜃) >
is negative definite, there is an extreme value solution of 𝜋𝑅 with
𝜕𝜋 𝜕𝜋 𝛽 2 𝛾 2 (2−2𝜃+𝛽𝜃) 𝜕𝑊
respect to 𝑃1 and 𝑃2 . Let 𝜕𝑃𝑅 = 0 and 𝜕𝑃𝑅 = 0, then we can obtain 4𝛽 2
> 0, we can obtain 𝜕𝛽1 > 0. Differently, the relationship
1 2
𝑊 𝑊 𝛾2
that 𝑃1 = 𝛽+𝜃−𝛽𝜃+𝛽𝛾𝑔
2(1−𝛽 2 )
+ 21 and 𝑃2 = 1−𝜃+𝛽𝜃+𝛾𝑔
2(1−𝛽 2 )
+ 22 . Substituting 𝑃1 between 𝑤1 and 𝜃 is influenced by the magnitude of 𝜇. When 𝜇 = 4−2𝛽 ,
and 𝑃2 into 𝜋𝑀2 , we can obtain the Hessian matrix of 𝜋𝑀2 with respect 𝜕𝑤
( ) we can obtain 𝜕𝜃1 = 0, thereby 𝑊1 and 𝐷1 are independent with 𝜃.
𝛾
−1 𝛾2 𝛾2 𝜕𝑊1
to 𝑊2 and 𝑔 is 2 , and there is an extreme value solution When 4−𝛽 2 < 𝜇 < 4−2𝛽 , thus 𝜕𝜃
< 0, 𝑊1 and 𝐷1 are decreasing
𝛾
2
−𝜇 𝛾2
functions with respect to 𝜃, and the opposite is true when 𝜇 > 4−2𝛽 .
𝛾2
of 𝜋𝑀2 with respect to 𝑊2 and 𝑔 when 𝜇 > 4
. At this point, let
𝜕𝜋𝑀1 𝜕𝜋𝑀2 𝜕𝜋 𝛾(2−2𝜃+𝛽𝜃)
= 0, = 0, and 𝜕𝑔𝑀2 = 0, we can obtain that 𝑔 = ,
𝜕𝑊1 𝜕𝑊2 2(4𝜇−𝛽 2 𝜇−𝛾 2 ) Proof of Proposition 2. Taking partial derivatives of 𝑃1 and 𝑃2
2
𝜃(4𝜇−𝛾 )+2𝛽𝜇(1−𝜃) (2−2𝜃+𝛽𝜃)𝜇 𝜕𝑃
𝑊1 = 2(4𝜇−𝛽 2 𝜇−𝛾 2 )
, and 𝑊2 = 4𝜇−𝛽 2 𝜇−𝛾 2
. Finally, substituting with respect to 𝛾, 𝜃, and 𝜇 separately, we can obtain that 𝜕𝛾1 =

11
H. Song et al. Expert Systems With Applications 237 (2024) 121606

𝛽𝛾𝜇(5−2𝛽 2 )(2−2𝜃+𝛽𝜃) 𝜕𝑃 2𝜇(2𝛽 3 −3𝛽 2 −5𝛽+6)−(3−2𝛽 2 )𝛾 2 𝜕𝑃 𝛾 2 𝜃2

2(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )
, 𝜕𝜃1 = 4(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )
, and 𝜕𝜇1 = 𝑀1 is larger than that of 𝑀2 when 𝜇 > 4(2𝜃−1)
and the opposite is true
2 2
𝛽𝛾 (2𝛽 −5)(2−2𝜃+𝛽𝜃) 𝜕𝑃2
2
3𝛾𝜇(2−𝛽 )(2−2𝜃+𝛽𝜃) 𝜕𝑃 2 𝜇(4𝛽 −6𝛽 −10𝛽+12)−𝛽𝛾 2
3 2 𝛾2 𝛾 2 𝜃2
; 𝜕𝛾 = 2(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )2 , 𝜕𝜃 = − 4(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 ) , when 4−𝛽 2
<𝜇≤ .
4(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )2 4(2𝜃−1)
𝜕𝑃 3𝛾 2 (𝛽 2 −2)(2−2𝜃+𝛽𝜃) 𝜕𝑃1
and 𝜕𝜇2 = 4(1−𝛽 2 )(4𝜇−𝛽 2 𝜇−𝛾 2 )2 . Obviously, we can obtain that 𝜕𝛾 > 0,
𝜕𝑃1 𝜕𝑃2 𝜕𝑃2
< 0, 𝜕𝛾 > 0, and 𝜕𝜇 < 0. Let 𝑓1 (𝛽) = 2𝛽 3 − 3𝛽 2 − 5𝛽 + 6, thus Proof of Proposition 6. Comparing the magnitudes of 𝑊1∗ and 𝑊2∗ , 𝐷1∗
𝜕𝜇
𝑓1′ (𝛽) = 6𝛽(𝛽 − 1) − 5 < 0. 𝑓 1 (𝛽) is monotonically decreasing in [0, 1). and 𝐷2∗ , 𝑃1∗ and 𝑃2∗ , and we can obtain that
∗ ∗ (𝛾+𝜆)(𝛾𝜃+𝜆)+2𝜇(1−2𝜃)(2−𝛽+𝜆)
𝜕𝑃 𝑊2 − 𝑊1 = 2𝜇(2−𝛽+𝜆)(2+𝛽+3𝜆)−(𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)] , 𝐷2∗ − 𝐷1∗ =
Since 𝑓 1 (1) = 0, 𝑓 1 (𝛽) > 0 holds in [0, 1), and then 𝜕𝜃2 < 0 holds
(1+𝜆)[(𝛾+𝜆)(𝛾𝜃+𝜆)+2𝜇(1−2𝜃)(2−𝛽+𝜆)]
3−𝛽 2 , 𝑃2∗ − 𝑃1∗ =
in [0, 1). Furthermore, we compare the magnitudes of 2(2𝛽 3 −3𝛽 2 −5𝛽+6)
2𝜇(2−𝛽+𝜆)(2+𝛽+3𝜆)−(𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
(3+2𝛽+5𝜆)[(𝛾+𝜆)(𝛾𝜃+𝜆)+2𝜇(1−2𝜃)(2−𝛽+𝜆)]
1 3−𝛽 2 1 𝛽(5−2𝛽 2 ) . It is clear that when 0 ≤ 𝜃 ≤
and 4−𝛽 2 . Since 2(2𝛽 3 −3𝛽 2 −5𝛽+6)
− 4−𝛽 2
= 2(2𝛽 4 +𝛽 3 −11𝛽 2 −4𝛽−12)
, we let 2𝜇(2−𝛽+𝜆)(2+𝛽+3𝜆)−(𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
1 ∗ > 𝑊 ∗ , 𝐷∗ > 𝐷∗ , and 𝑃 ∗ > 𝑃 ∗ . However, the relation-
𝑓2 (𝛽) = 2(2𝛽 4 + 𝛽 3 − 11𝛽 2 − 4𝛽 − 12). Because first-order derivative of 2
, 𝑊 2 1 2 1 2 1
𝑓2 (𝛽) is 𝑓2′ (𝛽) = 2(8𝛽 3 + 3𝛽 2 − 22𝛽 − 4) which is obviouly less than 0. ship between the magnitude of 𝑊1∗ and 𝑊2∗ , 𝐷1∗ and 𝐷2∗ , and 𝑃1∗
Along with the condition that 𝑓2 (1) = 0, we can obtain 𝑓2 (𝛽) > 0 in and 𝑃2∗ when 21 < 𝜃 ≤ 1 are is determined by the magnitude of
2 (𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
3−𝛽 2 𝛾2
[0, 1) and thus 2(2𝛽 3 −3𝛽 1 𝜕𝑃1
2 −5𝛽+6) > 4−𝛽 2 . Therefore, 𝜕𝜃 > 0 when 4−𝛽 2 <
𝑚𝑎𝑥{ (𝛾+𝜆)
4(1+𝜆)
(𝛾+𝜆)(𝛾𝜃+𝜆)
, 2(2−𝛽+𝜆)(2+𝛽+3𝜆) } and 2(2𝜃−1)(2−𝛽+𝜆) (𝛾+𝜆)(𝛾𝜃+𝜆)
. When 2(2𝜃−1)(2−𝛽+𝜆)
2
(3−𝛽 2 )𝛾 2 (3−𝛽 2 )𝛾 2
𝜇 < and the opposite is true when 𝜇 > . ≤ 𝑚𝑎𝑥{ (𝛾+𝜆) , (𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)] }, 𝑊2∗ < 𝑊1∗ , 𝐷2∗ < 𝐷1∗ , and 𝑃2∗ <
2(2𝛽 3 −3𝛽 2 −5𝛽+6) 2(2𝛽 3 −3𝛽 2 −5𝛽+6) 4(1+𝜆) 2(2−𝛽+𝜆)(2+𝛽+3𝜆)
2 )𝛾 2
When 𝜇 = 2(2𝛽 3(3−𝛽 −3𝛽 2 −5𝛽+6)
, 𝑃1 is independent with 𝜃. 𝑃1∗ always hold whatever 𝜇 takes. However, it is different when
(𝛾+𝜆)(𝛾𝜃+𝜆) 2 (𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
2(2𝜃−1)(2−𝛽+𝜆)
> 𝑚𝑎𝑥{ (𝛾+𝜆)
4(1+𝜆)
, 2(2−𝛽+𝜆)(2+𝛽+3𝜆) }. 𝑊2∗ > 𝑊1∗ , 𝐷2∗ > 𝐷1∗ ,
2 (𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)]
Proof of Proposition 3. Taking partial derivatives of 𝜋𝑀1 and 𝜋𝑀2 and 𝑃2 > 𝑃1 hold when 𝑚𝑎𝑥{ (𝛾+𝜆)
∗ ∗
4(1+𝜆)
, 2(2−𝛽+𝜆)(2+𝛽+3𝜆) } < 𝜇 <
𝜕𝜋𝑀
1
with respect to 𝛽, 𝛾, 𝜃, and 𝜇 separately, we can obtain that 𝜕𝛽
= (𝛾+𝜆)(𝛾𝜃+𝜆) (𝛾+𝜆)(𝛾𝜃+𝜆)
and the opposite is true when 𝜇 ≥ 2(2𝜃−1)(2−𝛽+𝜆) .
𝜕𝜋𝑀 2(2𝜃−1)(2−𝛽+𝜆)
𝜇[𝜇(4+𝛽 2 )(1−𝜃)+16𝛽𝜃𝜇−𝛾 2 (1−𝜃+𝛽𝜃)][4𝜃𝜇+2𝛽𝜇(1−𝜃)−𝛾 2 𝜃] 1
2(4𝜇−𝛽 2 𝜇−𝛾 2 )3
,
𝜕𝛾
=
𝛽𝛾𝜇(2−2𝜃+𝛽𝜃)[4𝜃𝜇+2𝛽𝜇(1−𝜃)−𝛾 2 𝜃] 𝜕𝜋𝑀 2 ][4𝜃𝜇+2𝛽𝜇(1−𝜃)−𝛾 2 𝜃]
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, 𝜕𝜃 1 = [2(2−𝛽)𝜇−𝛾 4(4𝜇−𝛽 2 𝜇−𝛾 2 )2
, and
𝜕𝜋𝑀 𝛽𝛾 2 (2−2𝜃+𝛽𝜃)[4𝜃𝜇+2𝛽𝜇(1−𝜃)−𝛾 2 𝜃] 𝜕𝜋𝑀
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𝐶2
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∗
𝜕𝑔 ∗ 2(𝛾+𝜆)(2−𝛽+𝜆)(2+𝛽+3𝜆)[2(1−𝜃)+𝜆(2−𝜃)+𝛽𝜃] 𝜕𝑔 ∗ (𝛾+𝜆)(2−𝛽+𝜆) 𝜕𝑊1 //dx.doi.org/10.1016/j.spc.2021.11.006.
𝜕𝜇
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2(𝛾+𝜆)[𝛽(𝛾+𝜆)+𝜆(𝛾−2−𝜆)][2(1−𝜃)+𝜆(2−𝜃)+𝛽𝜃] 𝜕𝑊1∗ 2𝜇(2−𝛽+𝜆)−𝛾(𝛾+𝜆) 𝜕𝑊2∗ 0697.
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𝐶2
, 𝜕𝜇
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𝜕𝑊 ∗
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𝐶2
, 𝜕𝜇2 = − 2𝜇(2−𝛽+𝜆)
𝐶
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(𝛾+𝜆)[2𝛾+2𝛾𝜆+𝜆(2−𝛽+𝜆)] efficient frontier for evaluating decision-making units with fixed-sum outputs.
𝜆 > 0, 2(1 − 𝜃) + 𝜆(2 − 𝜃) + 𝛽𝜃 > 0, and 𝜇 > 2(2−𝛽+𝜆)(2+𝛽+3𝜆)
, it is Annals of Operations Research, http://dx.doi.org/10.1007/s10479-022-05013-7.
𝜕𝑔 ∗ 𝜕𝑔 ∗ 𝜕𝑔 ∗ 𝜕𝑊2∗ 𝜕𝑊2∗ 𝜕𝑊2∗ Gan, M., Li, D., Wang, J., Zhang, J., & Huang, Q. (2021). A comparative analysis of
obvious that 𝜕𝛾
> 0, ,
𝜕𝜇 𝜕𝜃
< 0, 𝜕𝛾
> 0, and 𝜕𝜇
, 𝜕𝜃
< 0.
the competition strategy of seaports under carbon emission constraints. Journal of
Cleaner Production, 310, http://dx.doi.org/10.1016/j.jclepro.2021.127488.
2𝜇(2−𝛽)(1−2𝜃)+𝛾 2 𝜃 Gregory, R. P. (2022). The effect of atmospheric greenhouse gases on firm value
Proof of Proposition 5. Since 𝑊2 − 𝑊1 = 2(4𝜇−𝛽 2 𝜇−𝛾 2 )
, 𝑃2 − 𝑃1 =
and firm size distribution. Journal of Cleaner Production, 358, Article 131751.
(3+2𝛽)[2𝜇(2−𝛽)(1−2𝜃)+𝛾 2 𝜃] 4𝜇(1−2𝜃)+𝛾 2 𝜃
4(1+𝛽)(4𝜇−𝛽 2 𝜇−𝛾 2 )
, and 𝑊2 − 𝑊1 = 8(4𝜇−𝛽 2 𝜇−𝛾 2 ) , it is obvious that http://dx.doi.org/10.1016/j.jclepro.2022.131751.
Gu, M., Yang, L., & Huo, B. (2021). The impact of information technology usage on sup-
𝑊2 > 𝑊1 , 𝑃2 > 𝑃1 , and 𝜋𝑀2 > 𝜋𝑀1 when 0 ≤ 𝜃 ≤ 12 . If 12 < 𝜃 ≤ 1, due to
ply chain resilience and performance: An ambidexterous view. International Journal
𝛾2𝜃 2 𝛾2𝜃 𝛾2
2(2𝜃−1)(2−𝛽)
× 4−𝛽 𝛾2
= 2+𝛽1 > 1, we can obtain that 2(2𝜃−1)(2−𝛽) > 4−𝛽 2. of Production Economics, 232, http://dx.doi.org/10.1016/j.ijpe.2020.107956.
2(2− ) 𝜃 He, P., Wang, Z., Shi, V., & Liao, Y. (2021). The direct and cross effects in a
𝛾2𝜃
Hence, 𝑊2 < 𝑊1 and 𝑃2 < 𝑃1 when 𝜇 > 2(2𝜃−1)(2−𝛽)
and the opposite is supply chain with consumers sensitive to both carbon emissions and delivery time.
𝛾2 𝛾2𝜃 European Journal of Operational Research, 292(1), 172–183. http://dx.doi.org/10.
true when 4−𝛽 2
<𝜇 ≤ 2(2𝜃−1)(2−𝛽)
. To further analyze the relationship 1016/j.ejor.2020.10.031.
between the magnitude of the profits of manufacturers 𝑀1 and 𝑀2 , Heydari, J., Govindan, K., & Basiri, Z. (2021). Balancing price and green quality in
𝛾2𝜃 2 𝜃(𝜃−1) presence of consumer environmental awareness: a green supply chain coordination
we let 𝐺(𝜃) = 2(2𝜃−1)(2−𝛽) and obtain that 𝐺′ (𝜃) = 𝛾2(2𝜃−1) 2 ≤ 0. Hence, approach. International Journal of Production Research, 59(7), 1957–1975. http:
𝛾2 2 1
𝐺𝑚𝑖𝑛 (𝜃) = 𝐺(1) = 4
and 𝐺(𝜃) ∈ [ 𝛾4 , +∞). When 2
< 𝜃 ≤ 1, if //dx.doi.org/10.1080/00207543.2020.1771457.
𝛾2 𝛾 2 𝜃2 Hong, X., Cao, X., Gong, Y., & Chen, W. (2021). Quality information acquisition
4−𝛽 2
≥ 4(2𝜃−1)
, whatever value 𝜇 takes, the profit of manufacturer 𝑀1 and disclosure with green manufacturing in a closed-loop supply chain. Interna-
𝛾2 𝛾 2 𝜃2 tional Journal of Production Economics, 232, http://dx.doi.org/10.1016/j.ijpe.2020.
is larger than that of 𝑀2 . If 4−𝛽 2
< 4(2𝜃−1)
, the profit of manufacturer
107997.

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