Title: Vertical emission reduction in a green supply chain and government subsidy incentive decision under channel preference

Authors: Lihui Hu; Zhongwei Wang; Qian Yin; Yan Pang

Addresses: Central South University of Forestry and Technology, Changsha 410001, China; Huaihua University, Huaihua 410800, China ' Central South University of Forestry and Technology, Changsha 410001, China ' Central South University of Forestry and Technology, Changsha 410001, China ' Central South University of Forestry and Technology, Changsha 410001, China

Abstract: This paper combines green development energy conservation and emission reduction with government subsidies to build a three-stage game model including the manufacturer, retailer, and government. Considering the different preferences in dual channels, this paper studies whether government should subsidise the supply side or the demand side, and the difference in subsidies under the leadership of different entities in a supply chain. The research shows that sales price of traditional retailers, wholesale price of manufacturers and demand of traditional retailers increased with the rise of preference of traditional channels. The direct selling channel price, wholesale price, and traditional retail price at the subsidised supply side are lower than those at the demand side, and the direct selling channel price is not subject to changes of leadership in the supply chain. Social welfare reaches its peak under Nash equilibrium. Finally, the validity of the conclusion is further verified by an example analysis.

Keywords: channel preference; Stackelberg game; government subsidies; Nash equilibrium; green supply chain; supply side; demand side; decision.

DOI: 10.1504/IJAAC.2021.118523

International Journal of Automation and Control, 2021 Vol.15 No.6, pp.649 - 668

Received: 28 Oct 2019
Accepted: 15 Feb 2020
Published online: 28 Oct 2021 *

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