Creating a low carbon economy through green supply chain management: investigation of willingness-to-pay for green products from a consumer’s perspective

Senmao Xia, Yantao Ling, Leanne de Main, Ming K. Lim, Gendao Li, Peter Zhang and Mengqiu Cao

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This study investigates how consumers’ willingness-to-pay (WTP) for green products affects the decisions made by the green supply chain players. Through the application of game theory and uncertainty theory, our findings show that a higher consumer WTP for green products usually leads to a higher retail price and market share of green products, which motivates retailers and manufacturers to invest more in green technology. We also find that an increased WTP for green products can spur retailers to reduce the optimal green cost-sharing rate due to the pressure of increasing costs. In addition, we find that retailers are willing to lower the cost sharing rate when the confidence level increases. Regarding the contributions made by this study, it is one of the first to explore the transmission mechanisms involved in the management of the green supply chain by linking consumers’ WTP for green products to strategic decisions made by green supply chain players under conditions of uncertainty. Furthermore, our study could help green supply chain players to optimise the cost sharing mechanisms they use to generate more revenue, due to the increase in WTP for green products, which will in turn help to facilitate a low carbon economy.

Keywords: cost sharing; game theory; Green supply chain management; low carbon economy; uncertainty theory; willingness-to-pay (search for similar items in EconPapers)
JEL-codes: D10 Q50 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in International Journal of Logistics Research and Applications, 2022. ISSN: 1367-5567

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:116895

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