Green design and information sharing in a horizontally competitive supply chain

Abstract

This study explores the impact of information sharing on green supply chains with horizontal competition, addressing an important yet underexplored issue. Using a Stackelberg game framework, we examine green product design and information-sharing dynamics in a supply chain consisting of a common retailer and two competing manufacturers. The retailer decides whether to share green demand information with manufacturers, who then determine product greenness, while the retailer sets the retail price. The findings reveal that information sharing can have mixed effects on manufacturers’ profitability, depending on competitive dynamics and demand sensitivity to product greenness. Additionally, the interplay between information sharing and green design strategies emphasizes the importance of aligning product design decisions with optimal information-sharing practices. While information sharing consistently improves environmental performance in non-competitive settings, it can lead to negative environmental outcomes in competitive scenarios. Extending the analysis to cases where manufacturers control wholesale pricing and information is shared sequentially, the findings remain robust. This study highlights the dual role of information sharing as a driver of supply chain efficiency and a potential source of environmental inefficiencies in competitive markets. The results offer actionable insights for crafting green supply chain strategies that balance economic and environmental objectives.