How Does the Government's Limitation of Carbon Emission Policy Impacts Retailing Decision on the Heterogeneous Leadership Supply Chain?

In this paper, a model containing two manufacturers of different market competitiveness retailing products in the carbon emissions trading market with competition was established. Among them, a manufacturer is in a limited market leadership position and intermediate state between the Stackelberg game and the Cournot game. Furthermore, the impact of the government's dynamic adjustment of carbon emission limits was studied in the model. The paper analyzes the sources of system instability and the influences of various parameters on the stability of the model under this competitive mode. The impact of government adjustment strategies on retailing decisions and stability is also analyzed. The results show that the instability of the system is mainly derived from the adjustment strategy of the leading manufacturer, and the stronger the leadership position is that the more instable the system will be. At the same time, the government's restrictions on carbon emission limits will also increase market instability