Abstract
Green product design is a vital measure to support sustainable development in a circular economy era. This paper studies the multi-product pricing and green product design strategies under different supply chain structures and government subsidy strategies. Considering different channel leadership, we establish the centralized (C), manufacturer-led (MS), and retailer-led (RS) supply chain models, respectively. By applying a game-theoretical approach, corresponding equilibrium pricing, green product design, and government subsidy decisions under different supply chain structures are obtained. Through comparison and numerical analysis, we find that: (1) the different subsidy strategies of the government have an important impact on green product development. When the government provides a uniform subsidy strategy, a RS supply chain can bring greener product, more market demands, more profit, and more social welfare; (2) when the government provides a differentiated subsidy strategy, MS and RS supply chain structures can bring greener product and more market demand than the centralized supply chain. They can also bring the same social welfare and the same product to the green design level. However, the MS supply chain structure can bring more profit for the firm; (3) the consumers’ green awareness positively impacts the design and development of green product. Therefore, it is beneficial for the firm to adopt reasonable measures to boost the environmental awareness of consumers in order to realize the sustainable development of our society.
Highlights
Sustainable supply chain management has received increasing attention in a circular economy era, driven by environmental responsibilities, consumer pressures, government regulations, and competitor pressures [1]
We find that manufacturer-led and retailer-led supply chains have the same social welfare when the government provides a differentiated subsidy strategy, which is different from their research
In order to show the novelty of this article more clearly, we provide Table 1 to present the main differences between our work and related studies, which can be summarized in three points
Summary
Sustainable supply chain management has received increasing attention in a circular economy era, driven by environmental responsibilities, consumer pressures, government regulations, and competitor pressures [1]. Hong et al [6] investigate the effects of tax regulation, consumers’ reference behaviors, and CEA on the green product design and competitive pricing strategies under both manufacturer-led and retailer-led supply chain structures. The main difference is that our study considers two types of consumer subsidy strategies (not tax regulation) from the government and investigates their effects on the green product design. To answer the above research questions and fill these research gaps, we investigate the multi-product pricing and green product design strategies in a sustainable supply chain, considering the government’s different subsidy strategies and different channel power structures. We compare the optimal decisions, profits of the supply chain, and total social welfare under different channel power structures and subsidy strategies of the government.
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