Creating a low carbon economy through green supply chain management: investigation of willingness-to-pay for green products from a consumer’s perspective

Xia, Senmao, Ling, Yantao, de Main, Leanne, Lim, Ming K., Li, Gendao, Zhang, Peter and Cao, Mengqiu (2022) Creating a low carbon economy through green supply chain management: investigation of willingness-to-pay for green products from a consumer’s perspective. International Journal of Logistics Research and Applications. ISSN 1367-5567

Text (FinalManuscript_4Sep2022) - Accepted Version Download (1MB)

Abstract

This study investigates how consumers’ willingness-to-pay (WTP) for green products affects the decisions made by the green supply chain players. Through the application of game theory and uncertainty theory, our findings show that a higher consumer WTP for green products usually leads to a higher retail price and market share of green products, which motivates retailers and manufacturers to invest more in green technology. We also find that an increased WTP for green products can spur retailers to reduce the optimal green cost-sharing rate due to the pressure of increasing costs. In addition, we find that retailers are willing to lower the cost sharing rate when the confidence level increases. Regarding the contributions made by this study, it is one of the first to explore the transmission mechanisms involved in the management of the green supply chain by linking consumers’ WTP for green products to strategic decisions made by green supply chain players under conditions of uncertainty. Furthermore, our study could help green supply chain players to optimise the cost sharing mechanisms they use to generate more revenue, due to the increase in WTP for green products, which will in turn help to facilitate a low carbon economy.

Item Type:	Article
Additional Information:	© 2022 Informa UK Limited, trading as Taylor & Francis Group.
Divisions:	Statistics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HA Statistics
JEL classification:	Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General
Date Deposited:	04 Oct 2022 10:48
Last Modified:	16 Nov 2024 22:15
URI:	http://eprints.lse.ac.uk/id/eprint/116895

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