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A Game Theoretic Approach for Improving Environmental and Economic Performance in a Dual-Channel Green Supply Chain

by , *,† and
School of Economics and Management, Tongji University, Shanghai 200092, China
Author to whom correspondence should be addressed.
These authors contributed equally to this work.
Sustainability 2018, 10(6), 1918;
Received: 15 May 2018 / Revised: 1 June 2018 / Accepted: 3 June 2018 / Published: 8 June 2018
In this paper, we investigate economic performance and environmental performance of a dual-channel green supply chain (GSC). Given that most relevant literature still focus on the descriptive aspect of GSC, we adopt game theoretic approach rather than qualitative analysis method to address the following problems: (1) How can the integration of environmental and economic sustainability goals be achieved in GSC? (2) What is the impact of customer environmental awareness on the green level and profitability of the GSC? (3) How does the market demand changes in the presence of the online direct channel in addition to the traditional one? We establish four game models, which are decentralized scenario, centralized scenario, retailer-led revenue-sharing scenario and bargaining revenue-sharing scenario. In the decentralized scenario, participants in a GSC make individual decisions based on their specific interests. In the centralized scenario, the GSC is regarded as a whole and the participants make collective decisions to maximize the overall profit of the GSC. In addition, in the two revenue-sharing scenarios, revenue-sharing contracts as the important profit coordination systems are set up and the revenue-sharing ratio is determined either by the retailer or through bargaining. Moreover, the cost of green product research and development, customer environmental awareness and price sensitivity are also taken into account in the four scenarios. By comparing and analyzing the four game models, we recommend the two revenue-sharing scenarios as the optimum choice and improving green awareness as a feasible strategy to achieve the integration of economic and environmental goals of the GSC. Additionally, we find that online sales has become a major distribution channel of the GSC. View Full-Text
Keywords: sustainability; green supply chain; green degree; game model sustainability; green supply chain; green degree; game model
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Ma, W.; Cheng, Z.; Xu, S. A Game Theoretic Approach for Improving Environmental and Economic Performance in a Dual-Channel Green Supply Chain. Sustainability 2018, 10, 1918.

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