Research On Green Supply Chain Dynamic Decision-making Based On Government Regulation

In recent years,the increasingly serious problems on environmental pollution,lack of resources,and irrational use of energy,sustainable development has attracted attention from all of the world,and many countries and enterprises have gradually carried out green practices.On the one hand,governments have formulated environmental policies such as subsidies and taxes in enterprises,so as to supervise the production and operation of enterprises,to guide and encourage them to adopt green behaviors.On the other hand,the improvement of consumers' awareness on green consumption and more acknowledge of green products stimulate enterprises to implement green practices.However,the development of green products and green supply chain in China are still in its infancy.Enterprises should bear high initial investment costs for taking green behaviors and have limited ability to adopt green production technology.Therefore,it is necessary for the government to provide enterprises with financial subsidies to improve their greening level.At the same time,for non-green enterprises,economic punishments should also be implemented.Based on the development status of China's green supply chain and green product market,and by reviewing domestic and foreign literature and practical experience about environmental regulations and corporates' green behaviors,this article uses principal-agent theory,optimal control theory,differential game,evolutionary game and system dynamics to carry out the research.Taking adverse selection and long-term dynamics into consideration,the author constructs cooperative contracts between government and enterprises or members of the supply chain to explore the green behavior of enterprises and the decision-making of green supply chains under different government environmental regulations.The results provide insights into the policy-making of governments and enterprises management on sustainable development.The main contents of this article are as follows.(1)The incentive mechanism on manufacturer's green decision-making in the process of government procurement is explored.In view of asymmetric information about product greenness,lump-sum transfer and fixed-and flexible-proportion benefit-sharing contracts are developed.Furthermore,a non-linear coordination contract is proposed,in which manufacturers disclose their true private information and maximize members' own benefit as well as optimize overall benefit.Revelation principle is used to obtain the solutions of government transfer payments,ordering quantities for green products,and product greenness under the contracts.Combined with the green product development status in China,whether the contract could reveal true green-degree and impel manufacturers to improve their product's green-degree is examined.In the case of government procurement on remanufactured inkjet printers,the flexible-proportion benefit-sharing contract is adopted,which verifies the positive effect of the flexible proportional contract on the government to identify the true greenness of products and strengthen the green level of enterprises.(2)From the perspective of long-term dynamics,supply chain's green decisionmaking under different forms of government subsidies is studied.A two-tier supply chain consisting of a single manufacturer and a single retailer without government participation,under lump-sum subsidy mechanism and under unit subsidy mechanism is constructed,separately.Differential game is used to obtain trajectories of manufacturer's green production effort,pricing decision,and retailer's effort to advertise green products.Product green-degree,product goodwill,and supply chain benefits under each model are also compared and analyzed.Combined with the development of new energy vehicle industry in China,the impacts of the two subsidy modes on the greenness,goodwill,and profits of manufacturer and dealer of new energy vehicles are compared.Research shows that two forms of government subsidies both have a positive impact on improving product greenness,product goodwill,and supply chain's profit.In view of the current state of new energy vehicle industry in China,the lump-sum government subsidy can better stimulate the development of new energy vehicles.(3)Long-term dynamic cooperation mechanism between upstream and downstream members of the supply chain is designed.The independent decisions of the manufacturer and the retailer is extended to the cooperation mechanism between the members.Cost-sharing contract is proposed in which the manufacturer assume a portion of retailer's advertising cost to stimulate green products advertising input.The supply chain members' decision-making,state variables,i.e.product greenness and product goodwill,and supply chain benefits are analyzed under different forms of government subsidy.In the new energy vehicle case,the manufacturer and dealer are expected to establish a long-term cost-sharing contract,and the product greenness,product goodwill,and supply chain benefits are compared with those under independent decisions.The results indicate that cost-sharing contracts are conducive to increasing the enthusiasm of dealers in advertising,and thus the product goodwill and the overall profits of the supply chain are improved.(4)The evolutionary process of government regulation and supply chain green decision-making is explored under reward and punishment mechanism.A threepopulation model of suppliers,manufacturers and governments based on evolutionary game theory is established,and the evolutionary stable strategies(ESS)of their unilateral and joint behaviors are analyzed combined with payment matrixes and the replication dynamic equations.Furthermore,system dynamics(SD)is applied to empirical analysis for exploring the dynamic interaction of the populations' strategy,and the key factors affecting ESS are also discussed in detail.Combined with the case of electronic equipment supply chain,the stability of the partial equilibrium strategy is analyzed,and the influence of initial strategy,government reward and punishment on the evolutionary path of each group is discussed.Research shows that in the long-term game,strengthening green subsidy and penalty can encourage companies to adopt green behaviors.As for the electronic equipment supply chain,government should first give incentives to downstream manufacturers,for their green behavior will further affect upstream suppliers' production of green raw materials.In a word,considering information asymmetry,different environmental regulations,and long-term dynamic game of supply chain members,this paper focuses on the green decision-making problem of enterprises,cooperation and incentive relationships between enterprises and governments under the government environmental regulation.Combining the theoretical results with the cases of government procurement on remanufactured products,new energy automobile supply chain and electronic product supply chain,the practical guidance for green industry development as well as the formulation and implementation of sustainable development strategy for government are provided.