Pricing policies of dual-channel green supply chain: Considering government subsidies and consumers' dual preferences

Abstract

With the increasing attention of global governments to environmental issues, the concept of environmental protection has been introduced into the supply chain, and green supply chain management has become particularly important. Based on this, this paper uses the research method of Stackelberg game theory to propose the green supply chain model with a dual-channel structure, in which consumer green preference and channel preference are considered. In addition, two cases of government subsidies and no government subsidies are also considered. The paper is aimed to explore products collaborative pricing policies in dual-channel green supply chain, and compare the optimal solutions in two cases. Findings illustrate that government subsidies will reduce green products’ price, and effectively promote the sales of green products; government subsidies are beneficial to the manufacturer, and the impact on retailer's profit depends on the amount of government subsidies; the higher the consumer's green preference or the lower the offline channel preference, the greater the demand for green products. The research findings can provide useful insights for members of the dual-channel green supply chain to make optimal decisions with and without government subsidies, thereby enhancing the market competitiveness of green products.