Eco-label strategy selection for green product development in supply chain

Abstract

In a supply chain where a supplier and a manufacturer engage in green innovation activities, we apply the Stackelberg game to investigate the influence of consumer trust and consumer green awareness on supply chain performance when employing self-labeling and certification label strategies. Our research delves into the optimal eco-label strategy through comparative analysis, resulting in the following key points: (1) Under the certification label strategy, the manufacturer and supply chain profits may decrease in consumer green awareness. (2) The manufacturer tends to choose self-labeling strategy, but the supplier has higher profits under certification label strategy. (3) The social welfare under the certification label is greater than that of self-labeling when the cost of certification and consumer trust are low. Further, we extend the certification label from single level to multi-level, and found that when the cost coefficient of manufacturer's green investment is high, a high-level certification may be disadvantageous for the manufacturer. In addition, when consumer trust and cost coefficient of manufacturer's green investment are both low, the manufacturer is more likely to preferentially choose multi-level certification label over self-labeling.