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

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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)

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.

Suggested Citation

  • Lingzhi Shao & Qianwen Liu, 2022. "Decision-Making and the Contract of the Complementary Product Supply Chain Considering Consumers’ Environmental Awareness and Government Green Subsidies," IJERPH, MDPI, vol. 19(5), pages 1-27, March.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:5:p:3100-:d:765272
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    2. Ruwen Tan & Xiang Qing & Jingsong Yang & Jing Zhang & Deng Li, 2022. "Analysis on Recycling Channel Selection of Construction and Demolition Waste in China from the Perspective of Supply Chain," IJERPH, MDPI, vol. 19(9), pages 1-17, April.

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