Coordination in a Two-Level Green Supply Chain with Environment-Conscious and Price-Sensitive Customers: A Nash Equilibrium View

Cooperative in environmental protection effort expenses plays a significant role in green supply chains and makes up the majority of promotional budgets in many product lines for both manufacturers and retailers. Nevertheless, research dealing with both product pricing and environmental protection effort expenses at the same time is sparse. That is why our work is concerned with co-op environmental protection effort expenses and pricing strategies in a two-level green supply chain consisting of a manufacturer, a retailer and environment-conscious and price-sensitive customers. The price, environmental protection effort expenses and profits allocation are analyzed by Nash game theory. Through theory analysis, we gain the conclusion that, in Nash game scenarios, in order to maximize their own profits and achieve the supply chain coordination, the retailer should burden a bigger environmental protection effort expense, if the manufacturer burdens a bigger production cost than retailer´s marketing cost.