The Impact of Consumer Subsidies and Diseconomies of Scale on Firms′ Low-Carbon Strategies under Centralized and Decentralized Supply Chains

To investigate how consumer subsidy policies and the diseconomies of scale of low-carbon products jointly affect firms' low-carbon strategies and the moderating role of supply chain structure, a game-theoretic model with two competing supply chains was developed. The model represents three typical structures: centralized–centralized, centralized–decentralized, and decentralized–decentralized. By solving the equilibrium strategies under each structure, the study analyzes firms’ low-carbon product choices and their economic implications, while identifying the role of double marginalization in decentralized supply chains. The results show that firms tend to maintain conventional products under low subsidy levels. As subsidies increase, they gradually shift to producing low-carbon products. Although low-carbon products exhibit diseconomies of scale, firms can still achieve a win-win outcome with competitors by producing low-carbon products, challenging the conventional view that diseconomies of scale hinder green transition. Notably, in decentralized supply chains, the inherent double marginalization effect can have a positive impact. It intensifies market competition, encouraging firms to adopt low-carbon products to build differentiation advantages, thus increasing the likelihood of a win-win outcome. Further extending the model to include consumer low-carbon preferences and different competitive scenarios confirms that the main conclusions remain robust. This study is the first to reveal the internal mechanism by which consumer subsidies, diseconomies of scale, and supply chain structure interact to shape firms′ low-carbon strategies. It highlights the positive role of double marginalization in promoting green transition and provides theoretical and practical guidance for firms’ low-carbon strategy formulation and government subsidy design.