A Green Supply-Chain Decision Model for Energy-Saving Products That Accounts for Government Subsidies

Jian Xue, Ruifeng Gong, Laijun Zhao, Xiaoqing Ji and Yan Xu
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Jian Xue: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
Ruifeng Gong: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
Laijun Zhao: Sino-US Global Logistics Institute, Shanghai Jiao Tong University,1954 Huashan Rd., Shanghai 200030, China
Xiaoqing Ji: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China
Yan Xu: School of Economics and Management, Shaanxi University of Science and Technology, Xi’an 710021, China

Sustainability, 2019, vol. 11, issue 8, 1-17

Abstract: Government subsidies are a common policy adopted to promote energy conservation and emission reduction. The decision-making that occurs within the green supply chain for energy-saving products under government subsidies is an area of great academic interest and game theory is becoming a popular tool in such research. In this paper, we examined centralized and decentralized decision-making models for the green supply chain and a coordinated decision-making model for revenue-sharing contracts based on game theory. We studied the effects of government subsidies on retail prices, energy conservation levels, market demand, supply chain profits, and social welfare for energy-saving products. We then compared the effectiveness of the three models using a numerical example. Our results revealed the range of contract parameters for which manufacturer and retailer profits increase. Our results show that government subsidies can significantly improve social welfare and promote the improvement of energy-saving products. Centralized decision-making generates higher profits than decentralized decisions and government subsidies were positively correlated with the level of energy conservation, product prices, and market demand. Revenue sharing contract coordination decisions can coordinate the supply chain and achieve the same effect as centralized decisions.

Keywords: government subsidies; energy conservation; green supply chain; social welfare (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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