Optimal strategies of green product supply chains based on behaviour-based pricing

Abstract

Behaviour-based pricing (BBP) fully considers the willingness to pay, behavioural characteristics and rational expectations of new and old customers and can dynamically adjust pricing strategies based on purchase histories. Therefore, compared with uniform pricing, BBP can promote the development of green products in the market. Additionally, BBP gradually influences the pricing decisions of the supply chain. Therefore, this paper explores for the first time the pricing decisions and coordination mechanisms of the green product supply chain (GPSC) under a behavioural pricing model. BBP is implemented under two scenarios, centralisation and decentralisation, and the optimal pricing and supply chain decision-making are compared. Under the centralised scenario, the profit, greenness, market share and environmental friendliness are all higher than those under the decentralised scenario, and in most cases, consumers can better afford green products. Therefore, a revenue-sharing model is designed to realise GPSC coordination under BBP. The numerical experiments show that the proportion of revenue shared by green product retailers is positively correlated with the initial market share of green products; the proposed coordination mechanism can improve the greenness and profits of enterprises in a GPSC, the consumer surplus of green products and the overall environment performance.