The Effect of Retailer’ Social Responsibility and Government Subsidy on the Performance of Low-Carbon Supply Chain

Based on the cap-and-trade regulation, the effect of retailer’s social responsibility and subsidy are analyzed in a two-level low-carbon supply chain. The government subsidizes manufacturer to encourage low-carbon technological innovation. It is gotten that both retailer’s social responsibility and subsidy can improve the profit of manufacturer and reduce the carbon emission level. Although more subsidies to manufacturer indeed may decrease the profit of retailer, it is good measure to promote the centralized decision-making between the retailer and manufacturer. A certain retailer’s social responsibilities are good for the carbon emission reduction, but it also brings about the decline of profit in the supply chain. The centralized decision-making is always the best choice strategy for the carbon emission reduction, while in the decentralized decision-making situation, the retailer has more possibilities to care about social responsibility.