Effect and formulation of ecolabel policy: A perspective of green supply chain decision and coordination

Abstract

Abstract The ecolabel policy is crucial for sustainable development of green supply chain. Considering manufacturer's reputation and consumer’s environmental awareness, this study proposes a few of game models to investigate the impact of the ecolabel policy on the green supply chain. Specifically, four different scenarios are investigated: centralized supply chain with/without certification and decentralized supply chain with/without certification. The results indicate that the ecolabel policy only functions below a threshold of the consumer’s environmental awareness which is higher in the decentralized situation. Only when choosing the certification standard as its green degree, can the manufacturer get the optimal profit. Aiming to maximize the environmental benefit, the optimal ecolabel standard in the centralized decision-making situation is higher than that in the decentralized ones. Furthermore, a wholesale price contract with the manufacturer's reputation is established to make both the product’s green degree and the whole environmental benefit reach the optimal level in a decentralized supply chain.