Pricing, greening, and transparency decisions considering the impact of government subsidies and CSR behavior in supply chain decisions

Hossein Khosroshahi, Stanko Dimitrov and Seyed Reza Hejazi

Journal of Retailing and Consumer Services, 2021, vol. 60, issue C

Abstract: In this paper, we analytically model different government subsidy strategies in a supply chain manufacturing and selling a green product. We model the interaction between greening degree and transparency level set by a manufacturer and its impact on not only the supply chain, but also consumers and the government. The supply chain is composed of a manufacturer and a retailer. The manufacturer can choose two different strategies. First, he only cares about his production profit; and second, he concerns with CSR in addition to his production profit. We develop a new transparency-based index of consumer satisfaction to model how the market reacts to manufacturer CSR decisions. The government decide three different subsidy strategies. A three-stage Stackelberg game model is developed and solved to analytically derive managerial insights. As a result, if the transparency cost coefficient is sufficiently high, the greening degree and transparency level in CSR concerns strategy are higher than when the manufacturer is not concerned with corporate social responsibility. In addition, when the transparency cost coefficient is sufficiently high, the profit of supply chain members and government are equal in both strategies. We give a real-world example of Iranian brick industry.

Keywords: Game theory; Government subsidy; Transparency; Corporate social responsibility (CSR); Green products (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:60:y:2021:i:c:s0969698921000515

DOI: 10.1016/j.jretconser.2021.102485

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