A Game-Theoretic Approach to Greening, Pricing, and Advertising Policies in a Green Supply Chain

In this paper, greening, pricing, and advertising policies in a supply chain will be examined with government intervention. The supply chain has two members. First, a manufacturer seeking to determine the wholesale price and the greening level; second, a retailer that has to determine the advertising cost and the retail price. The government is trying to encourage the manufacturer to green the production using subsidies. By using the game theory, at first, the demand function and the profitfunctions of both members are introduced; then, in a dynamic game, their Stackelberg equilibrium is calculated. Sensitivity and parameter analysis is made for more illustration of the problem. This study found the supply chain profit function behavior, and results showed that if the sensitivity of demandprice was less than a specific value, the manufacturer would not participate in greening policies

Keywords:

sustainable supply chain , greening policies , advertising , pricing , Stackelberg , game theory.