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Pricing and Competition in Green Supply Chains Under Government Intervention
Mojtaba NowrouziFasih1 , Anwar Mahmoodi2 , Reza Maihami3
1- Department of Industrial Engineering, University of Kurdistan, Sanandaj, Iran
2- Department of Industrial Engineering, Faculty of Engineering, University of Kurdistan, Sanandaj, Iran , anwar.mahmoodi@uok.ac.ir
3- Stetson-Hatcher School of Business, Mercer University, Atlanta, GA, USA.
Abstract:   (244 Views)
The demand for green products has increased in the past few years due to the heightened awareness of environmental issues and the increasing use of green products by consumers. Thus, choosing the best strategy for green product manufacturers is essential. At the same time, producers and retailers are likely to have their decisions influenced by government actions. In this study, we attempt to determine the product's price and greenness within two competitive supply chains. The study investigates the pricing of two substitutable and green products in which each supply chain produces a green product. Using Nash and Stackelberg Game models, we determine how supply chains and their members interact. A Nash model involves two competing supply chains with equal power, within each supply chain, however, there is a Stackelberg competition between the retailer and the manufacturer. The Stackelberg model assumes that one of the supply chains is the market leader. The results show that with increasing government intervention (government's adjustment factor and green level floor for subsidies), regardless of Nash or Stackelberg structures, the green level of the product will increase, and wholesale and retail prices will decrease. Additionally, the price changes in the retailer-Stackelberg structure are greater than those in the manufacturer-Stackelberg structure. Also, by bearing the greenness cost by the manufacturer or retailer, companies can positively impact their profits as well as the level of greenness in their products. When the manufacturer makes an investment in greenness, the retailer and consumer benefit from it, and ultimately become the main force behind the development of green products.
 
Keywords: Sustainable Supply Chain, Government Intervention, Pricing, Competition, Game Theory.
     
Type of Study: Research | Subject: Logistic & Apply Chain
Received: 2024/08/26 | Accepted: 2025/05/7
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Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.