Proceedings of the 2nd International Conference on Public Management, Digital Economy and Internet Technology, ICPDI 2023, September 1–3, 2023, Chongqing, China

Research Article

Two-stage Green Supply Chains Considering the Impact of Dynamic Subsidy Rates

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  • @INPROCEEDINGS{10.4108/eai.1-9-2023.2338817,
        author={Andi  Lin and Wenkun  Zhou and Xinyue  Li},
        title={Two-stage Green Supply Chains Considering the Impact of Dynamic Subsidy Rates},
        proceedings={Proceedings of the 2nd International Conference on Public Management, Digital Economy and Internet Technology, ICPDI 2023, September 1--3, 2023, Chongqing, China},
        publisher={EAI},
        proceedings_a={ICPDI},
        year={2023},
        month={11},
        keywords={green supply chain government subsidies sustainable development energy saving and emission reduction},
        doi={10.4108/eai.1-9-2023.2338817}
    }
    
  • Andi Lin
    Wenkun Zhou
    Xinyue Li
    Year: 2023
    Two-stage Green Supply Chains Considering the Impact of Dynamic Subsidy Rates
    ICPDI
    EAI
    DOI: 10.4108/eai.1-9-2023.2338817
Andi Lin1,*, Wenkun Zhou1, Xinyue Li1
  • 1: Shanghai University
*Contact email: 787898394@shu.edu.cn

Abstract

Nowadays, more and more companies are investing in the development and production of environmentally friendly products. This paper investigates a dynamic pricing strategy and a dynamic subsidization strategy for a two-stage green supply chains containing a manufacturer and a retailer under both centralized decision-making scenario and decentralized decision-making scenario and investigates the investment behavior of manufacturer and the pricing behavior of retailer. We find that not only does centralized decision-making allow for greater efficiency at lower prices, but it also reduces government efforts to induce manufacturers to produce environmentally friendly goods. Firms also have more incentive to introduce discounts when price reductions can better attract consumers, which allows firms to reserve space for price reductions by raising the initial price of the product and gain profit by this way. However, when consumers are more interested in the current price of a product, the room for price cuts is therefore limited, which highly constrain the capacity of obtaining benefits for the companies who produce green products. This means that the government should choose the suitable time period to provide subsidies in order to maximize the effectiveness of the subsidies, and at the same time companies should choose whether or not to offer promotions based on the type of customer.