Decision-Making and the Contract of the Complementary Product Supply Chain Considering Consumers’ Environmental Awareness and Government Green Subsidies

Lingzhi Shao and Qianwen Liu
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Lingzhi Shao: School of Management Science and Engineering, Anhui University of Technology, Ma’anshan 243002, China
Qianwen Liu: School of Management Science and Engineering, Anhui University of Technology, Ma’anshan 243002, China

IJERPH, 2022, vol. 19, issue 5, 1-27

Abstract: The environmental awareness of consumers and enterprises has gradually increased, and green production and green consumption have become the main theme of social economy. On the other hand, the complementary product market has become an important source of competitive advantage for enterprises. Considering a complementary product supply chain, and taking account of the consumers’ environmental awareness and the green subsidies provided by the government, this paper examines members’ decisions in relation to four contract models based on game theory. By solving the model, it is shown that the government’s green subsidy plan improves the green degree of subsidized products and complementary products. Furthermore, compared to wholesale price contracts, revenue-sharing and cost-sharing contracts motivate manufacturers to improve the greenness of subsidized products, and they achieve a Pareto improvement for the whole supply chain and its members, when the contract parameters are appropriate. Numerical experiments also reveal that both the greenness of the complementary products and the profit for members increase with the green innovation spillover effect as a result of the complementary products and the scale of green consumers with environmental awareness in the market. This study provides good guidance for decision-making concerning the complementary product supply chain, and further contributes to environmental protection.

Keywords: complementary products; green decisions; contract coordination; consumers’ environmental awareness; green subsidy (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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