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<p>Supplier encroachment often increases carbon emission due to the addition of distribution channels. However, suppliers may claim to reduce emissions without undertaking genuine mitigation efforts. This study develops a principal–agent framework in which the retailer (principal) offers the supplier (agent) a menu of contracts defined by an indirect-channel order quantity and a wholesale price. The supplier selects a contract option consistent with its (possibly hidden) carbon emission reduction (CER) effort, determines the direct-channel quantity, and reports the level of reduced emissions. These channel quantities then determine the prices in each channel. Numerical examinations reveal that, when a supplier falsely claims CER, the distrusting retailer reduces its orders by 64% and forces the supplier to reallocate 72.3% of the sales quantity to the direct channel. Furthermore, rising CER investment cost increase the incentive required to induce truthful revelation by non-CER supplier by $ 0.59 and impose a $ 0.62 penalty on the supplier that falsely claim CER. These models guide environmentally conscious retailers in screening for greenwashing suppliers engaged in channel encroachment. The study’s novelty lies in its incorporation of information asymmetry regarding carbon reduction within dual-channel supply chain (DCSC) structures.</p>

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Contracting Dual-channel Green Supply Chain with Information Asymmetry in Carbon Reduction Effort

  • 期刊论文

  • 发表日期：

    2026年1月14日

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  • Januardi Januardi,
  • Devi Maulida Rahmah,
  • Ryozo Noguchi

摘要

Supplier encroachment often increases carbon emission due to the addition of distribution channels. However, suppliers may claim to reduce emissions without undertaking genuine mitigation efforts. This study develops a principal–agent framework in which the retailer (principal) offers the supplier (agent) a menu of contracts defined by an indirect-channel order quantity and a wholesale price. The supplier selects a contract option consistent with its (possibly hidden) carbon emission reduction (CER) effort, determines the direct-channel quantity, and reports the level of reduced emissions. These channel quantities then determine the prices in each channel. Numerical examinations reveal that, when a supplier falsely claims CER, the distrusting retailer reduces its orders by 64% and forces the supplier to reallocate 72.3% of the sales quantity to the direct channel. Furthermore, rising CER investment cost increase the incentive required to induce truthful revelation by non-CER supplier by $ 0.59 and impose a $ 0.62 penalty on the supplier that falsely claim CER. These models guide environmentally conscious retailers in screening for greenwashing suppliers engaged in channel encroachment. The study’s novelty lies in its incorporation of information asymmetry regarding carbon reduction within dual-channel supply chain (DCSC) structures.