The Dual-Channel Green Supply Chain Performance Under Government Monitoring: A Game Theoretic Approach

Nowadays, consumers tend to use more green and healthy products. Consumer awareness of environmental issues increases today. Declining natural resources, rising disease rates, and rising global temperatures due to industry-wide pollution have raised public concerns. The supply chain, as an important issue and involved with these problems, has always attracted the attention of researchers. A two-channel supply chain is considered in this study. The supply chain consists of one green producer and two retailers along with a Third-party Logistics Company (TPL). The government is also considered as the leader of the structure. The results show that the strategy adopted by the government has a major effect on other members’ decisions of the supply chain and can therefore increase/decrease pollution. On the other hand, cooperating with a TPL company also reduces environmental pollution, despite rising costs. The obtained results emphasize that by growing the value of subsidies allocated to the producer, the government can reduce the amount of pollution in the SC. Moreover, increasing the amount of subsidy will lead to an increase in the degree of product greenness. Also, increasing the degree of the greenness of the product does not always increase the profitability of SC members.