Optimal strategies in a green supply chain with retailer service investment and government subsidy: a game-theoretic analysis with fairness preferences

The environmental pollution problem caused by building materials enterprises has been paid attention to by scholars. However, the existing research on supply chain management cannot explain the influence mechanism of green building materials supply chain profit under duopoly competition. This paper aims to reveal the influence mechanism of green supply chain profit of building materials, according to the duopoly competition model and Stackelberg game. There are four main conclusions in this paper. (1) The profit of the supply chain under centralised decision is higher than that under decentralised decision and cost-sharing decision; cost cost-sharing decision is the best decision for building materials manufacturers and retailers. (2) Consumer green preference has a positive impact on the profits of building materials manufacturers, retailers and green supply chain of building materials. (3) Under different scenarios, the competition intensity coefficient between building materials manufacturers has different influences on the profit of the green supply chain of building materials. (4) Different ordinary building materials manufacturers’ markets have different impacts on the profit of the green supply chain of building materials. This paper not only provides a decision-making basis for the production and operation of green building materials but also offers a theoretical basis for green supply chain management.

Government subsidies play an important role in the operations of a green supply chain. However, the effectiveness of these subsidies under different power structures has rarely been examined. In this paper, we investigate a two-echelon green supply chain with a manufacturer who obtains government subsidies to develop and produce green products and a retailer who sells to consumers. We examine the impact of government subsidies on green product innovation, supply chain profits, and social welfare by focusing on five power structure models: centralized decision (C), manufacturer-Stackelberg (MS), retailer-Stackelberg (RS), vertical Nash (NL), and vertical Nash with bargaining mechanism (NB) models. The results show that government subsidies have a positive impact on the energy-saving level of green products, firms’ financial performance, and supply chain profits. We also find that the NB model is the optimal power structure of decentralized decision scenarios in terms of green product innovation, supply chain profits, and social welfare. Our findings indicate that if supply chain members have equal power and bargaining mechanisms the effectiveness of government subsidies will be enhanced. This study provides new theoretical insights for green supply chain research by revealing the interplay between the power structure of the green supply chain and government subsidies.

With the increasing demand for “green” goods, it is necessary for companies to develop green innovation to seize market opportunities. Companies often use the model of supply chain cooperation to carry out green innovation. The standard reward and punishment contract model is constructed based on the green degree of the product provided by the supplier when the manufacturer has a fair preference. The impact of the manufacturer’s fairness preference on the green degree of the product, price, manufacturer’s profit, supplier’s profit, and overall profit when the product green degree standard provided by the supplier is greater or smaller than the manufacturer’s demand standard is analyzed. The impact of the difference in channel power between manufacturers and suppliers is also analyzed on the overall profit of the green supply chain. The research results showed that when the manufacturer’s attention to fairness is equal to the attention to self-interest, the overall profit of the green supply chain is the largest, the coordination of the supply chain can be achieved, and the difference in the channel power of the participants in the green supply chain has a significant impact on the overall profit, which is verified by numerical analysis.

In order to analyze the logistics service mode and sales mode selection strategy, a green low-carbon supply chain consisting of a single manufacturer and a single e-commerce platform is considered. First, in the green low-carbon supply chain which consists of a direct selling channel and reselling channel, the selection strategy of the manufacturer's logistics service mode is analyzed. Second, in the green low-carbon supply chain which consists of a direct selling channel and an agency channel, the selection strategy of the manufacturer's logistics service mode is analyzed. Last, the manufacturer's sales mode is analyzed. We use the backward induction method to solve the theoretical model. This study contributes to the literature by considering the optimal decision of a green low-carbon supply chain. This study brings together the literature from streams on the selling channel selection strategy in green supply chains and the logistics service strategy in green supply chains. The impacts of the logistics service cost, the selling cost, and the green input cost coefficient on the optimal decision and the firms' profit are discussed. The result shows that in the direct selling channel and reselling channel, when the basic market demand and the logistics service level of the third-party logistics service provider are low, manufacturers will choose the e-commerce platform logistics service; in the opposite case, manufacturers will choose the third-party logistics service. In the direct selling channel and agency channels, when the logistics service level of the third-party logistics service provider is greater than or equal to a certain critical value and less than or equal to the logistics service level of the e-commerce platform, manufacturers will choose the e-commerce platform logistics service; in the opposite case, manufacturers will choose the third-party logistics service. No matter whether the manufacturer chooses the logistics service provided by the third-party logistics service provider or the logistics service provided by the e-commerce platform, the manufacturer should choose the direct selling channel and the agency channel.

To study the impact of government subsidies and altruistic preferences on green supply chain innovation, Stackelberg game theory and numerical simulation are used to analyze and verify the optimal decision-making of enterprises under different decision-making models. The results show that the two methods of government subsidies can improve product greenness, corporate profits, and overall supply chain performance. While only the unilateral altruistic preference of the manufacturer or retailer can improve product greenness, the profit of the other member, and the overall profit of the green supply chain, doing so will reduce its own profit. When the two members have the same degree of altruistic preference, the retailer’s altruistic preference is more conducive to improving product greenness. Increasing government subsidies can strengthen, to a certain extent, the effect of altruistic preference on product greenness, the profit of the other member, and the profit of the green supply chain. However, when the manufacturer implements altruistic preference, if the government subsidy exceeds a certain range, then the increase in the government subsidy will accelerate the decline of the manufacturer’s own profit.

Taking into consideration fairness concerns and altruistic preferences of manufacturers, this paper aims to propose a green dual-channel supply chain that incorporates consumers’ environmental awareness (CEA) and channel preference. The purpose of this work is to explore and further compare the optimal outcomes in a green dual-channel supply chain in three scenarios, which are the fairness-neutrality scenario (Model N), the manufacturer is concerned with fairness scenario (Model F), and the manufacturer has altruistic preference (Model A), respectively. The game-theoretical models with different fairness preferences, comparative, and numerical analyses are used to put forward the impacts of consumers’ channel preference and CEA on pricing, profits, and utilities, and to identify the differences in decisional outcomes between the three models. The results indicate that CEA always contributes to developing the green market while adversely affecting common products. Moreover, consumers’ channel preferences might enable the manufacturer and retailer to enhance profitability under certain conditions. The findings also reveal that manufacturer’s fairness concerns can possibly increase the demand for green products but impair the overall performance of the supply chain in general. Moreover, while the manufacturer’s altruistic preference benefits the retailer’s profits, it has a detrimental effect on the performance of the green supply chain. The practical implications of this research come to promote green consumption and increasing consumer awareness of environmental protection are effective ways to develop a green supply chain. It is also important to note that in order to maintain the durability and stability of the sup-ply chain, the manufacturer must maintain a moderate level of fairness preference behaviors so that downstream retailers will remain enthusiastic about establishing long-term relationships.

Government subsidies are a common policy adopted to promote energy conservation and emission reduction. The decision-making that occurs within the green supply chain for energy-saving products under government subsidies is an area of great academic interest and game theory is becoming a popular tool in such research. In this paper, we examined centralized and decentralized decision-making models for the green supply chain and a coordinated decision-making model for revenue-sharing contracts based on game theory. We studied the effects of government subsidies on retail prices, energy conservation levels, market demand, supply chain profits, and social welfare for energy-saving products. We then compared the effectiveness of the three models using a numerical example. Our results revealed the range of contract parameters for which manufacturer and retailer profits increase. Our results show that government subsidies can significantly improve social welfare and promote the improvement of energy-saving products. Centralized decision-making generates higher profits than decentralized decisions and government subsidies were positively correlated with the level of energy conservation, product prices, and market demand. Revenue sharing contract coordination decisions can coordinate the supply chain and achieve the same effect as centralized decisions.

The green supply chain not only relies on the manufacturer to provide green products, but also requires the supply chain members to provide green services. As a kind of green services, the extended warranty service can further expand the life cycle of products and reduce the frequency of products being eliminated due to damage. According to the existing literature research results, this paper finds that the influence of green degree on the enterprise's product green management strategy is gradually transferred to the product and service supply chain, and finally forms the green supply chain operation mode combining green production and green service. This paper analyzes the influence of product greenness and extended warranty service greenness on supply chain pricing strategy, and draws the following conclusions: Excessive green input will lead to the increase of extended warranty service price, resulting in the loss of consumers who buy extended warranty service. While reducing the green degree is good for enterprises to reduce costs, but low green will dampen the enthusiasm of consumers to buy products and the extended warranty service, and this will have a negative impact on the reputation of the company and the product. Therefore, this paper puts forward the suggestion that enterprises should consider the comprehensive effect of green degree and extended warranty service price, and set a reasonable green degree to improve the overall profit of supply chain.

Chronic information asymmetries in green markets erode consumer trust, creating dual impediments to sustainable consumption and supply chain efficiency. Blockchain addresses these challenges by leveraging its unique technical features. This research analyzes a two-stage green supply chain comprising a manufacturer and retailer, developing three models with key parameters: green preference levels, trust coefficients, and blockchain traceability costs. These models, which include a baseline non-blockchain model, blockchain-enabled decentralized decision-making and blockchain-integrated centralized decision-making frameworks, are designed to explore blockchain adoption strategies and coordination mechanisms. This research elucidates several critical insights: (1) The optimal level of green production investment correlates positively with consumer green preferences regardless of blockchain implementation. Blockchain incentivizes the manufacturer to boost green investments, stimulating demand, improving retailer profits and Consumer Surplus. (2) Beyond blockchain operational costs, consumer trust levels act as pivotal determinants in decisions regarding blockchain adoption. The manufacturer tends to be more inclined to adopt blockchain technology only when consumer trust levels and the fixed costs of blockchain implementation are both below specific thresholds. (3) Compared with the decentralized decision-making model, the centralized decision-making model exhibits elevated levels of green production investment, significantly higher overall supply chain profits, and an augmented Consumer Surplus. The design of a two-part tariff contract with fixed remuneration enables supply chain coordination. Within a defined threshold range, fixed remuneration can achieve Pareto improvement in profits for both manufacturer and retailer. (4) The asymmetric Nash bargaining equilibrium enables the efficient allocation of post-coordination surplus gains. This research offers theoretical support for blockchain adoption choices in green supply chains, promoting green, efficient, and sustainable supply chain development.

Government subsidy promotes the development of green supply chain, and the influence of decision-makers’ behavioral preferences becomes increasingly prominent in green supply chain management. In order to further enrich the research content of green supply chain, we first use Stackelberg game theory to construct game models by taking the product green degree, wholesale price and retail price as the decision variables, then we work out the equilibrium strategies of the manufacturer and the retailer under four decision scenarios, and reveal the impact differences between the two parties’ fairness preference behaviors. Our research mainly has the following findings: Firstly, the government subsidy to the manufacturer can benefit these two parties and can have certain impact on the optimal decisions only by working with the green product market expansion efficiency. Secondly, these two parties’ fairness preference behaviors can cause serious damage to the other party’s profit and the overall profit of green supply chain, and increase the rate of their own profit in the overall profit of green supply chain, but the difference is that the retailer’s fairness preference behavior can cause a greater decline in product green degree and wholesale price, and when certain conditions are met, its own profit may rise compared to its fairness neutral, while the manufacturer’s fairness preference behavior can cause a greater damage to the overall profit of green supply chainand make its own profit always be lower than its fairness neutral. Thirdly, the government subsidy to the manufacturer and the fairness preference behaviors of both parties can cause a stack effect on the optimal solutions, which means that the subsidy government provides for the manufacturer can aggravate the negative influence caused by these two parties’ fairness preference behaviors.

The green supply chain (GSC) can effectively reduce the waste of resources and avoid environmental pollution. For a closed-loop supply chain network consisting of multiple manufacturers, multiple retailers, and multiple consumer and recycling markets, we assume that retailers are responsible for the recycling of used products, manufacturers use raw materials to produce new products and recycled products for remanufacturing, and government departments subsidize all manufacturers and retailers for GSC technology investment. Then, the equilibrium conditions of manufacturers, retailers, demand markets, and recycling markets are obtained by using the variational inequality method, complementarity theorem, and Nash equilibrium theory, and the variational inequality model of the closed-loop supply chain network multiphase equilibrium is established. Based on numerical simulation, the optimal technology investment decision of green supply chain under different government subsidy rates, and the influence of market structure and enterprise cost asymmetry on the equilibrium solution of supply chain network are analyzed. The results show that government subsidies can effectively promote enterprises to upgrade their level of GSC technology investment. The intensification of enterprise competition and the asymmetry of enterprise costs will affect the composition of enterprise profits and the allocation of profits between enterprises, and the former will weaken the effect of government subsidies.

To encourage firms to engage in green production, two different types of investment funding, namely external funds from agencies outside the supply chain (e.g., government subsidy), and internal funds from supply chain partners (e.g., greening cost-sharing with the retailer), are investigated in this paper. Based on game theory, the decision-making behavior and profits of a competitive supply chain consisting of a green manufacturer, a regular manufacturer, and a retailer are analyzed under both funding schemes. The results show that while both government subsidy and greening cost-sharing contract can achieve the goals of increasing a product’s degree of greenness and increasing the sales of green products, there are differences between these two methods in reaching these goals. Further, both via theoretical and numerical analysis, we find that although both the green manufacturer and the retailer can greatly benefit from government subsidy and greening cost-sharing contract, they may have different preferences regarding these two methods, which are mainly related to the size of the government subsidy, the fraction of greening cost-sharing with the retailer, the Research and Development (R&D) cost coefficient, the greenness sensitivity coefficient, and price sensitivity coefficient. Finally, the supply chain members’ behaviors (including the production and pricing decisions and, the choice of funds investment) are largely affected by the government subsidy mechanism.

This paper investigates optimal ordering strategies in supply chains under two-level price fluctuations and initial profit allocation. By utilizing Copula functions to model the complex relationship between fluctuating prices and uncertain demand, the study develops both continuous and discrete decision models for practical applications. A discrete algorithm is proposed to approximate the optimal solution, with its convergence rigorously proven. Numerical experiments demonstrate that profit allocation ratios significantly impact optimal order quantities and overall supply chain profit. Price fluctuations, particularly at the discount level, present critical challenges, necessitating flexible and adaptive ordering strategies. The study also investigates the influence of different Copula relationships on optimal ordering decisions, revealing how varying market conditions—from moderate price sensitivity to high volatility—affect optimal order quantities. By examining ordering strategies in the context of profit allocation contracts, this research offers a new perspective on how supply chain members can collaboratively navigate uncertain markets. The findings provide actionable insights for managers to mitigate risks, improve coordination, and seize new opportunities. Extending traditional models to incorporate price fluctuations and profit allocation, this study makes theoretical and practical contributions to supply chain management, offering robust strategies to strengthen supply chain resilience.

Government’s green subsidy and retailer’s fairness concerns have great implications for enterprise’s operation strategy in the green supply chain (GSC). With the continuous deepening of retailer’s participation in supply chain management, the green services they provided by retailer have become a crucial role in promoting the terminal sales of green products. To further research the government subsidies and retailer’s fairness concerns on the optimal decisions of product pricing, green R&D, and service level, we construct four two-stage GSC models: no subsidy and fairness concerns, subsidizes manufacturer without retailer’s fairness concerns, subsidizes manufacturer with retailer’s fairness concerns, and subsidizes all members with retailer’s fairness concerns. The results show that subsidizes to manufacturers has significantly improved supply chain performance and environmental governance, but it exacerbates the unfair distribution of profits among members, and retailers’ fairness concerns drive them to offer lower green service level. With the green demand of consumers being unable to be fully satisfied, the consumer surplus and effectiveness of government environmental governance decrease accordingly. To eliminate the adverse effect caused by unfair distribution of profits, it is necessary to subsidize retailers so as to share their green service costs and increase their share of profits.

Green supply chain game model and analysis under revenue-sharing contract