Learning of Supply Chain Cost-Revenue Sharing Contract in the Form of Trade-off Mechanism in Pollution Control Problem

Abstract

A comprehensive comparison between supply chain cost-revenue sharing contract and trade-off mechanism is considered. Either of the two main members – manufacturer and retailers in the supply chain acts as the bellwether to initiate the green transition program through a cost-revenue sharing contract. While the trade-off mechanism which is applied in the pollution control problem is inspired by the sharing setting behind the contract, i.e., the player transfers part of her profit to another player in trade for her limited responsibility in reducing pollution. However, the power structure is not included in the trade-off mechanism where a third party should be designated to implement the details. The conclusion is given in the end.