Vertical emission reduction in a green supply chain and government subsidy incentive decision under channel preference

This paper combines green development energy conservation and emission reduction with government subsidies to build a three-stage game model including the manufacturer, retailer, and government. Considering the different preferences in dual channels, this paper studies whether government should subsidise the supply side or the demand side, and the difference in subsidies under the leadership of different entities in a supply chain. The research shows that sales price of traditional retailers, wholesale price of manufacturers and demand of traditional retailers increased with the rise of preference of traditional channels. The direct selling channel price, wholesale price, and traditional retail price at the subsidised supply side are lower than those at the demand side, and the direct selling channel price is not subject to changes of leadership in the supply chain. Social welfare reaches its peak under Nash equilibrium. Finally, the validity of the conclusion is further verified by an example analysis.