Carbon emission reduction strategy of manufacturer’s reciprocal preference under government subsidy

In the context of global efforts to combat climate change and promote sustainable development, this study investigates the role of government subsidies and suppliers' reciprocal preferences in enhancing carbon emission reduction within a two-echelon supply chain composed of manufacturers and suppliers. The research constructs three differential game models: one with government subsidies and no supplier reciprocal preference, another with both government subsidies and supplier reciprocal preference, and a centralized decision-making model. By analyzing these models, the study explores the dynamic impact of carbon emission reduction levels on consumer demand and identifies optimal strategies for supply chain members under different policy environments. The findings reveal that government subsidies and suppliers’ reciprocal preferences significantly enhance collaborative emission reduction efforts, with the latter fostering closer cooperation and improving supply chain efficiency. Moreover, when suppliers account for environmental sustainability costs, supply chain profits approach those achieved under centralized decision-making. The results underscore the importance of integrating government incentives with reciprocal behaviors to achieve both economic and environmental benefits, offering valuable insights for policymakers and supply chain managers aiming to promote sustainable practices.