Decision-Making in Dual-Channel Green Supply Chain Considering Market Structure

Abstract

With the increasing awareness of environmental protection among consumers, green products are increasingly favored by the general public. The rapid development of e-commerce has increased the channels for consumers to contact and purchase green products. In this paper, consumers’ perceived differences in product greenness among different channels are considered and three models of manufacturer-dominated Stackelberg game, retailer-dominated Stackelberg game and Nash equilibrium with equal power are constructed based on the difference pricing between online and offline channels. Also, the results of dual-channel structure are compared with those of single-channel respectively. The results show that when the green R & D costs are relatively high, manufacturers and retailers are motivated to compete as channel leaders, but for the entire supply chain, Nash’s decision-making can improve product greenness and profitability of the supply chain. When green R & D costs are low, manufacturers’ profits are higher under asymmetric power supply chains and lowest under vertical Nash decisions. Under the three kinds of power structure, product greenness and manufacturer’s profit are higher than single channel under dual-channel structure. The comparison of retailer’s profit in dual channel and single channel depends on green R & D costs.