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Considering two types of subsidies for producers (supplier and manufacturer) and one for consumers based on product greenness and sales quantity, this study aims to formulate optimal supply chain green innovation and subsidy strategies, and to achieve this goal with the support of information systems.

This study introduces a composite green-product supply chain where suppliers focus on green innovation for component greenness and manufacturers focus on green innovation for manufacturing process greenness. Game theory modeling is applied to investigate the differences of product greenness, supply chain members’ profit and social welfare under different government subsidy strategies.

Increasing the unit greenness subsidy coefficient can boost product greenness and supply chain members’ profits, but does not always raise social welfare. When the government exclusively offers subsidies to producers, subsidies should be allocated to suppliers when there is a significant disparity in supply chain green innovation costs. Conversely, it is more beneficial to subsidize manufacturers. Consumer subsidies have the potential to enhance both environmental and economic performance in the supply chain compared with producer-exclusive subsidies, but may not always maximize social welfare when supply chain members have low unit costs associated with green innovation.

This study examines the optimal decisions for green supply chain innovation and government subsidy strategies. Supply chain members and the government can use the information system to collect and evaluate the cost of upstream and downstream green innovation, and then develop reasonable collaborative green innovation and subsidy strategies.

The purpose of this paper is to find the optimal power structure that drives green practices in the supply chain and coordinate the costs and benefits of green practices in supply chain under different power structures.

This paper developed a supply chain of one supplier and one manufacturer, in which the supplier and the manufacturer are responsible for the “greening” of products. Then, the game theory modeling method is used to explore the influence of different power structures on green practices in the supply chain. Finally, the authors developed a green cost-sharing contract made by the leader; regarding optimal supply chain profits and green performance, the proposed contracts and the non-coordination situation are compared and tested by a numerical simulation.

The increase of the green practice difficulty of any member in the supply chain will not only reduce the greenness of products at that stage but will also reduce the green investment of the supply chain partner. Becoming a channel leader does not necessarily mean being more profitable than being a follower, and when the green practice difficulty of the leader is less than a certain threshold, ceding dominant power to the follower may benefit both sides. A green cost-sharing contract made by the leader is not necessarily beneficial to all enterprises.

This paper helps to better understand the role of the power relation in realizing the industry's green goals and helps decision-makers to achieve win-win cooperation by adjusting power relations and optimizing green cost-sharing contracts.