Green Technology Investment in a Decentralized Supply Chain under Demand Uncertainty

Cong Wang, Zongbao Zou and Shidao Geng
Additional contact information
Cong Wang: School of Maritime Economics and Management, Dalian Maritime University, Dalian 116026, China
Zongbao Zou: Business School, Shantou University, Shantou 515063, China
Shidao Geng: School of Maritime Economics and Management, Dalian Maritime University, Dalian 116026, China

Sustainability, 2021, vol. 13, issue 7, 1-25

Abstract: Green technology investment is an important factor that influences the sustainability and performance of the supply chain. In this paper, we use the game-theoretic approach, which is quite suitable to operation decision research, to model a supply chain consisting of one supplier and one retailer and discuss who should invest in green technology in a decentralized supply chain under demand uncertainty. An important result we found is that the retailer has a stronger investment motivation and higher investment efficiency compared to the supplier. The retailer also tends to invest in green technology himself when customers are not so sensitive to the product’s retail price. We analyze the supply chain sustainability, and find that high levels of green technology investments are not always necessarily good for environmental sustainability, it depends on the environmental impact’s sensitivity to green technology. Lastly, a joint investment mechanism is designed to induce the retailer to join in the green technology investment when he has no investment intention, and that realizes a Pareto improvement of the supply chain. Based on the results, we recommend designing more incentive mechanisms to induce the retailers to join in the green technology investment according to supply chain conditions.

Keywords: green technology; non-cooperative supply chain; supply chain sustainability; demand uncertainty (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/7/3752/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/7/3752/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:7:p:3752-:d:525426

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().