Evolutionary game of the green investment in a two-echelon supply chain under a government subsidy mechanism

Abstract

Abstract Environmental issues have gradually become one of the most important concerns for society. The concept of green development has attracted increasing attention, and the green supply chain is generated under this background. Governments have played an important role in encouraging enterprises to make green investments. To identify the optimal green investment strategy under a government subsidy policy, this paper studies the strategy of green investment for manufacturers and material suppliers in a two-echelon supply chain. First, an evolutionary game theory model is developed between a population of suppliers and a population of manufacturers under a government subsidy mechanism. Then, the evolutionarily stable strategies for suppliers and manufacturers are discussed. Finally, a simulation of the model is conducted to further clarify the impact of the green investment and government subsidy of the model. The results show that the green investment input-output ratio of suppliers and manufacturers, or the government subsidy changes, will cause the system to evolve into a different evolutionarily stable strategy. The initial proportion of green investment can predict the trend of future evolution in the market, provide a reference for enterprises to choose their strategies, and facilitate further macro-control of the market by the government. Setting the government subsidy value in the relevant range can reduce the free-riding behavior of suppliers or manufacturers in the market.