Abstract: In order to study the influence of overconfidence psychology of supply chain members on supply chain emission reduction decisions under carbon trading policies, taking a supply chain composed of a low carbon manufacturer and a retailer as the studied object, four Stackelberg game models are established respectively, including complete rationality of supply chain members, manufacturer overconfidence only, retailer overconfidence only and overconfidence of both supply chain members. Comparative analysis of supply chain emission reduction strategy for each model is conducted to provide theoretical basis for enterprise emission reduction strategies. Results are as follows. 1) Under carbon trading policies, when the manufacturer is overconfident, its profits rise regardless of the market environment, while the retailer profits decrease slightly; when the retailer is overconfident, the manufacturer profits rise and the retailer profits decline when the market environment is good, otherwise when the market environment is bad. 2) Under different carbon trading prices, the retailer profits show different trends with the increase of manufacturer overconfidence. When the carbon trading price is high, the retailer profits increase first and then decrease with the increase of manufacturer overconfidence; when the carbon trading price is low, the retailer profits decrease with the increase of manufacturer overconfidence. 3) Compared with the situation of rational supply chain members, overconfidence of manufacturers or retailers improves the emission reduction rate of products, and this effect becomes large as carbon trading prices rise.

Key words: carbon trading policy, overconfidence, emission reduction decision, game theory