Implications of dual-purpose concerns and power dynamics in green supply chains

This study investigates the dynamic interplay between dual-purpose concerns, integrating social responsibility with profit objectives, and green investment efficiency within green supply chains using a game-theoretical approach. These factors are examined in different configurations: Retailer Stackelberg (RS), Manufacturer Stackelberg (MS), and Vertical Nash (VN). Research results show that dual-purpose concerns generally improve both environmental efforts and overall profitability, but their effects vary depending on the supply chain structure. In the RS structure, the manufacturer’s dual-purpose concerns lead to better environmental and economic outcomes, while in MS and VN, the retailer’s concerns drive better results. Additionally, being the first to set prices is not always beneficial. For instance, when green investments are highly effective, the retailer prefers to follow the manufacturer’s lead. As investment efficiency drops, the retailer favors simultaneous decision-making or even taking the lead. For manufacturers, the MS structure is best if they prioritize profits. However, if they also care about social responsibility, their preferred role changes based on green investment efficiency and the level of dual-purpose concern, sometimes favoring leadership and other times a follower position or simultaneous decision-making. Furthermore, two extensions are examined: one considers the scenario in which both firms exhibit dual-purpose concerns, and the other explores a variable marginal production cost setting.