More Transparency, Better? The Value of Transparency in Carbon Information on E-Commerce Platform Operations

Abstract

The transparency of carbon information (TCI) directly influences consumer purchasing behavior and is vital in establishing a green corporate image for e-commerce platforms (platforms). This paper proposes the concept of "Consumer Dynamic Preference," offering a definition and a quantifiable modeling approach for assessing the TCI. Subsequently, a game-theoretical model is developed that includes a low-carbon retailer (LR), a conventional retailer (CR), and a platform. The study leverages the model to thoroughly investigate the mechanisms by which TCI affects stakeholders, enabling them to strategically respond to the market changes driven by TCI. The research findings reveal the following. First, in scenarios where the TCI is low, consumers typically adjust their rational preference (RP) for low-carbon products (LPs) to align with the average of their emotional preference (EP), with the goal of mitigating the risks associated with uncertainty. Second, increasing TCI markedly increases demand for LP and decreases demand for conventional products (CPs), but can lead to a general increase in both LP and CP prices. Finally, the increase of TCI notably enhances the profit for the LR, but could initially lower the earnings for the CR and platform. However, after TCI exceeds a certain threshold, the profits for the CR and platform rebound to their original levels and continue to expand as TCI further increases.

Keywords: Low-carbon, Consumer preference, Carbon information, Transparency, E-commerce platform