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Biform differential game approach to dynamic carbon reduction cooperation in transnational supply chains under CBAM.

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Title: Biform differential game approach to dynamic carbon reduction cooperation in transnational supply chains under CBAM.
Authors: Zheng, Xiao-Xue1 (AUTHOR), Lu, Yongkang2 (AUTHOR), Jia, Fu3 (AUTHOR) jeff_fujia@hotmail.com, Koh, Lenny4 (AUTHOR), Xiong, Yu5 (AUTHOR)
Source: International Journal of Production Research. Jul2026, Vol. 64 Issue 14, p5825-5847. 23p.
Subjects: Supply chains, Differential games, Emission control, Game theory, Carbon taxes, Prices
Abstract: The Carbon Border Adjustment Mechanism (CBAM) is a border tax implemented by highly carbon-regulation countries (HCRC) on imports from less carbon-regulation countries (LCRC). To analyse carbon reduction cooperation in transnational supply chains under CBAM, this study develops a biform differential game model involving a distributor in HCRC and two manufacturers (from HCRC and LCRC) supplying homogeneous products. Within this framework, supply chain members cooperate in carbon reduction while independently setting the wholesale prices or retail prices. The findings reveal a key distinction between cooperative and non-cooperative modes: under non-cooperation, pricing and emission reduction decisions remain static, whereas under cooperation, they dynamically evolve and gradually stabilise. Moreover, as the CBAM price increases, distributors in the cooperative model increase the LCRC product sales but reduce them in the non-cooperative setting. Consequently, under cooperation, the distributor's profit increases with CBAM prices, while under non-cooperation, the profit follows an inverse U-shaped pattern. Finally, the cooperative mechanism enhances sales, emission reductions, and both LCRC and HCRC manufacturers' profits compared to the non-cooperative model. However, the distributor achieves higher profits only when CBAM prices are sufficiently high, and thus should adopt the cooperative strategy under the same condition. [ABSTRACT FROM AUTHOR]
Copyright of International Journal of Production Research is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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  Data: Biform differential game approach to dynamic carbon reduction cooperation in transnational supply chains under CBAM.
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  Data: <searchLink fieldCode="AR" term="%22Zheng%2C+Xiao-Xue%22">Zheng, Xiao-Xue</searchLink><relatesTo>1</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Lu%2C+Yongkang%22">Lu, Yongkang</searchLink><relatesTo>2</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Jia%2C+Fu%22">Jia, Fu</searchLink><relatesTo>3</relatesTo> (AUTHOR)<i> jeff_fujia@hotmail.com</i><br /><searchLink fieldCode="AR" term="%22Koh%2C+Lenny%22">Koh, Lenny</searchLink><relatesTo>4</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Xiong%2C+Yu%22">Xiong, Yu</searchLink><relatesTo>5</relatesTo> (AUTHOR)
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  Data: <searchLink fieldCode="JN" term="%22International+Journal+of+Production+Research%22">International Journal of Production Research</searchLink>. Jul2026, Vol. 64 Issue 14, p5825-5847. 23p.
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  Data: <searchLink fieldCode="DE" term="%22Supply+chains%22">Supply chains</searchLink><br /><searchLink fieldCode="DE" term="%22Differential+games%22">Differential games</searchLink><br /><searchLink fieldCode="DE" term="%22Emission+control%22">Emission control</searchLink><br /><searchLink fieldCode="DE" term="%22Game+theory%22">Game theory</searchLink><br /><searchLink fieldCode="DE" term="%22Carbon+taxes%22">Carbon taxes</searchLink><br /><searchLink fieldCode="DE" term="%22Prices%22">Prices</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: The Carbon Border Adjustment Mechanism (CBAM) is a border tax implemented by highly carbon-regulation countries (HCRC) on imports from less carbon-regulation countries (LCRC). To analyse carbon reduction cooperation in transnational supply chains under CBAM, this study develops a biform differential game model involving a distributor in HCRC and two manufacturers (from HCRC and LCRC) supplying homogeneous products. Within this framework, supply chain members cooperate in carbon reduction while independently setting the wholesale prices or retail prices. The findings reveal a key distinction between cooperative and non-cooperative modes: under non-cooperation, pricing and emission reduction decisions remain static, whereas under cooperation, they dynamically evolve and gradually stabilise. Moreover, as the CBAM price increases, distributors in the cooperative model increase the LCRC product sales but reduce them in the non-cooperative setting. Consequently, under cooperation, the distributor's profit increases with CBAM prices, while under non-cooperation, the profit follows an inverse U-shaped pattern. Finally, the cooperative mechanism enhances sales, emission reductions, and both LCRC and HCRC manufacturers' profits compared to the non-cooperative model. However, the distributor achieves higher profits only when CBAM prices are sufficiently high, and thus should adopt the cooperative strategy under the same condition. [ABSTRACT FROM AUTHOR]
– Name: AbstractSuppliedCopyright
  Label:
  Group: Ab
  Data: <i>Copyright of International Journal of Production Research is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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RecordInfo BibRecord:
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      – Type: doi
        Value: 10.1080/00207543.2026.2616421
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      – Code: eng
        Text: English
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        PageCount: 23
        StartPage: 5825
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      – SubjectFull: Supply chains
        Type: general
      – SubjectFull: Differential games
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      – SubjectFull: Emission control
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      – SubjectFull: Game theory
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      – SubjectFull: Carbon taxes
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      – SubjectFull: Prices
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      – TitleFull: Biform differential game approach to dynamic carbon reduction cooperation in transnational supply chains under CBAM.
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            NameFull: Zheng, Xiao-Xue
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            NameFull: Lu, Yongkang
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              Text: Jul2026
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              Y: 2026
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