CHEMICAL ENGINEERING TRANSACTIONS
VOL. 51, 2016
A publication of
The Italian Association
of Chemical Engineering
Online at www.aidic.it/cet
Guest Editors: Tichun Wang, Hongyang Zhang, Lei Tian
Copyright © 2016, AIDIC Servizi S.r.l.,
ISBN 978-88-95608-43-3; ISSN 2283-9216
Agricultural Products Supply Chain Coordination: Price and
Green Level
Jian Tan
School of Management Science, Guizhou University of Finance and Economics, Guiyang, 550025 China
tanjian123@126.com
Research on the coordination of agricultural products' green supply chain has important practical significance
for the development of agriculture. In this paper, the problem of the price and the green level of green supply
chain of agricultural products is set up by game theory, three models including centralized decision-making,
wholesale price contract and revenue sharing contract are analyzed. Results show that the agricultural
products green level and the total income in the centralized decision-making model are the highest. The size
of the green level and farmer’s profits in the decentralized decision model are determined by the relationship
between the parameters of demand responsiveness to green SC’s own price, demand responsiveness to
enterprise effort level and enterprise effort costs. The enterprise’s profits in the wholesale price contract model
is higher.
1. Introduction
With the rapid development of the global economy, The change of consumer's demand driven economic
development mode, a kind of green supply chain model based on supply chain, considering the resource
consumption and environmental impact, came into being. With the development of green, organic and
pollution-free, the supply chain of agricultural products becomes an important platform of food quality and
safety management. The foundation of the green supply chain implementation is coordination, the
contradiction between industrial development and environmental protection is difficult to overcome according
to the traditional method of green supply chain management. The theoretical research and practical
experience have shown that the establishment of agricultural economy and ecological environment
coordinated development and interaction of the symbiotic mechanism is not only possible, but also is a new
way of agricultural sustainable development.
In recent years, some scholars have carried out extensive research on the green supply chain. (Barari et al.,
2012) established the evolutionary game models for the manufacturers and retailers, and give some
suggestions on the environment management. (Ghosh and Shah, 2014) research the two level supply chain
consisting of a manufacturer and a retailer, market demand decided jointly by the price and green innovation,
and use the two part of the contract to coordinate.(Cheng and Li, 2015) discussed the pricing and greening
strategies for the chain members in both centralized and decentralized cases using the Stackelberg game
model under a consistent pricing strategy. (Bazan et al., 2015) present two models that consider energy used
for production along with the greenhouse gases (GHG) emissions from production and transportation
operations in a single-vendor (manufacturer) single-buyer system under a multi-level emission-taxing scheme.
(Debabrata and Janat, 2015) explore supply chain coordination issues arising out of green supply chain
initiatives and explore the impact of cost sharing contract on the key decisions of supply chain players
undertaking green initiatives. (Ashkan, 2015) developed a price competition model of two green and regular
supply chains under the influences of government financial intervention, analyzed the effects of government’s
tariffs on the players’ optimal strategies and found that there are specific boundaries for tariffs which
guarantee stable competitive market. (Huang et al., 2015) considered a green supply chain with multiple
suppliers, a single manufacturer and multiple retailers. A game-theoretic model is established to
simultaneously investigate the impacts of the product line design, supplier selection, transportation mode
selection and pricing strategies on profits and greenhouse gases emissions. (Yang et al., 2015) formulated
DOI: 10.3303/CET1651156
Please cite this article as: Tan J., 2016, Agricultural products supply chain coordination：price and green level, Chemical Engineering
Transactions, 51, 931-936 DOI:10.3303/CET1651156
931
game mathematical models for product families and supply chains, employed a bi-level, nested genetic
algorithm to solve the game.
From the above literatures can be seen, at present, there are few scholars on the agricultural products green
supply chain coordination problem for a formal comprehensive discussion. On the basis of the above
literatures, we use the game equilibrium model to coordinate the agricultural products green supply chain, and
provide a reference for the decision making of green supply chain management.
2. Model description
A green agricultural products supply chain contain an enterprise and a farmer in our models. The enterprise
purchase raw agricultural products by price w per unit. After processing agricultural products, the enterprise
sell products to the market with price p per unit. In order to produce high quality agricultural products, the joint
effort of both sides are needed. The enterprise produce a higher quality of agricultural products through the
effort level θ, the farmer should improve the green level g of agricultural products.
Following (Dixit et al., 1979), we assume that the demand information is symmetrically known by both SC
members, and the demand function is linear in price, green level and enterprise effort level:
𝑑(𝑝, 𝑔, 𝜃) = 𝜙 − 𝛽𝑝 + 𝜆𝑔 + 𝛾𝜃 (1)
Where ϕ is the base market size, β,λ and γ denote the demand responsiveness to green SC’s own price,
green level and effort level respectively. Products quality effort costs of the enterprise is ω θ2/2, where ω is
the fixed cost parameter of effort.
According to Banker, (Khosla et al., 1998), the cost function of farmer for green SC is given by
𝑐(𝑔, 𝑥) = (𝑣 + 𝜖𝑔)𝑑 + 𝜉 𝑔2 2⁄ (2)
Thus, the green level selected by the farmer affects total costs in two ways. First, investment of green level
improvement program increases fixed production costs ξ g2/2, which is increasing and convex in the green
level g , and ξ is the fixed cost parameter. Second, the green level also has an impact on the production cost
per unit. Specifically, 𝑣 denotes the variable production cost per unit not including the quality related costs.
Given a green level 𝑔 selected by the farmer, the unit variable cost increases by ϵg, where ϵ>0. We assume
λ/β>ϵ, i.e., λ>βϵ.
Let πF, πE and πT denote the profits of the farmer, the manufacturer and the green SC, respectively. We use
subscripts 𝐶 , 𝑊 and 𝑅 to denote centralized model, wholesale price contract model and revenue sharing
contract, respectively. Superscript * denotes the optimal value.
3. Equilibrium decisions under different contracts
3.1 Centralized decision model equilibrium
Centralized decision model is the vertical integration of enterprise and farmer. The goal of the farmer and the
enterprise as a whole is to maximize their overall profits. According to (1) and (2), we can get the profits
function for the green SC as follow:
𝜋𝐶
𝑇 (𝜃, 𝑝, 𝑔) = (𝑝 − 𝑣 − 𝜖𝑔)(𝜙 − 𝛽𝑝 + 𝜆𝑔 + 𝛾𝜃) − 𝜔 𝜃2 2⁄ − 𝜉 𝑔2 2⁄ (3)
The first-order conditions characterizing equilibrium are:
𝜕𝜋𝐶
𝑇 /𝜕𝜃 = 𝑝𝛾 − 𝑣𝛾 − 𝑔𝛾𝜖 − 𝜃𝜔 = 0 (4)
𝜕𝜋𝐶
𝑇 /𝜕𝑝 = −2𝑝𝛽 + 𝑣𝛽 + 𝑔𝛽𝜖 + 𝛾𝜃 + 𝑔𝜆 + 𝜙 = 0 (5)
𝜕𝜋𝐶
𝑇 /𝜕𝑔 = −𝛾𝜖𝜃 − 𝑣𝜆 − 2𝑔𝜖𝜆 + 𝑝(𝛽𝜖 + 𝜆) − 𝑔𝜉 − 𝜖𝜙 = 0 (6)
Since𝜕2𝜋𝐶𝑇 𝜕𝜃2⁄ = −𝜔 < 0, 𝜕2𝜋𝐶𝑇 𝜕𝑝2⁄ = −2𝛽 < 0 , 𝜕2𝜋𝐶𝑇 𝜕𝑔2⁄ = −2𝜖𝜆 − 𝜉 < 0 , note that the Hessian of 𝜋𝐶𝑇 is
negative definite for all values of 𝜃, 𝑝 and 𝑔 if −2𝛽𝜔+𝛾2𝜉 + (𝛽𝜖 − 𝜆)2𝜔 < 0.
Solving Eqs.(4)~(6), we obtain the equilibrium price, green level and effort level for the green SC:
𝜃𝐶
∗ = 𝛾𝜉(𝑣𝛽 − 𝜙)/(𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 𝜉))𝜔), 𝑝𝐶∗ = ((𝛽𝜖2 − 𝜖𝜆 − 𝜉)𝜙𝜔 + 𝑣(𝛾2𝜉 + (𝜆2 − 𝛽(𝜖𝜆 +
𝜉))𝜔))/(𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 𝜉))𝜔), 𝑔𝐶∗ = −(𝛽𝜖 − 𝜆)(𝑣𝛽 − 𝜙)𝜔/(𝛾2 𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 𝜉))𝜔) .
Then we can have:𝜋𝐶𝑇∗ = 𝜉(𝜙 − 𝑣𝛽)2𝜔/2(−𝛾2𝜉 − (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 𝜉))𝜔) ,𝑑𝐶𝑇∗ = 𝛽𝜉(𝑣𝛽 − 𝜙)𝜔/(𝛾2𝜉 +
(𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 𝜉))𝜔).
3.2 Wholesale contract model equilibrium
For the wholesale price contract model, the enterprise purchase agricultural products by price w per unit. After
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processing agricultural products, the enterprise sell products to the market with price 𝑝 per unit. We express
the profits of the green SC member as follows:
𝜋𝑊
𝐸 (𝑝, 𝜃) = (𝑝 − 𝑤)(𝜙 − 𝛽𝑝 + 𝜆𝑔 + 𝛾𝜃) − 𝜔 𝜃2 2⁄ (7)
𝜋𝑊
𝐹 (𝑤, 𝑔) = (𝑤 − 𝑣 − 𝜖𝑔)(𝜙 − 𝛽𝑝 + 𝜆𝑔 + 𝛾𝜃) − 𝜉 𝑔2 2⁄ (8)
Because of enterprise apply the acquisition to obtain green agricultural products, so the farmer takes the
enterprise’s reaction into consideration when choosing its strategy. The enterprise’s reaction function for a
given (w,g) can be derived from the first-order derivative of 𝜋𝑊𝐸 in Eq.(12):
𝜕𝜋𝑊
𝐸 /𝜕𝜃 = 𝑝𝛾 − 𝑤𝛾 − 𝜃𝜔 = 0 (9)
𝜕𝜋𝑊
𝐸 /𝜕𝑝 = −2𝑝𝛽 + 𝑤𝛽 + 𝛾𝜃 + 𝑔𝜆 + 𝜙 = 0 (10)
Since 𝜕2𝜋𝑊𝐸 𝜕𝜃2⁄ = −𝜔 < 0 , 𝜕2𝜋𝑊𝐸 𝜕𝑝2⁄ = −2𝛽 < 0 , note that the Hessian of 𝜋𝑊𝐹 is negative definite for all
values of 𝜃 and 𝑝 if −𝛾2 + 2𝛽𝜔 > 0. Solving Eqs.(9)~(10), we can get:
𝜃𝑊
∗ = 𝛾(−𝑤𝛽 + 𝑔𝜆 + 𝜙)/(−𝛾2 + 2𝛽𝜔) (11)
𝑝𝑊
∗ = (−𝑤𝛾2 + 𝑤𝛽𝜔 + 𝑔𝜆𝜔 + 𝜙𝜔)/(−𝛾2 + 2𝛽𝜔) (12)
After substituting (11) and (12) into (7), according to its first order derivatives of Eq.(8) with respect to w and g,
respectively:
𝜕𝜋𝑊
𝐹 /𝜕𝑤 = (𝛽(𝑣𝜆 − 𝑤(𝛽𝜖 + 𝜆) + 𝜖𝜙)𝜔 + 𝑔(−𝛾2𝜉 + 2𝛽(𝜖𝜆 + 𝜉)𝜔))/(𝛾2 − 2𝛽𝜔) = 0 (13)
𝜕𝜋𝑊
𝐹 /𝜕𝑔 = 𝛽(𝑣𝛽 − 2𝑤𝛽 + 𝑔𝛽𝜖 + 𝑔𝜆 + 𝜙)𝜔/(−𝛾2 + 2𝛽𝜔) = 0 (14)
We can find the famer optimal wholesale price and green level by solving Eqs.(13) and (14):
𝑔𝑊
∗ = −(𝛽𝜖 − 𝜆)(𝑣𝛽 − 𝜙)𝜔/(2𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔) ,𝑤𝑊∗ = 𝜙(𝛾2𝜉 + 𝛽(𝛽𝜖2 − 𝜖𝜆 − 2𝜉)𝜔) +
𝑣𝛽(𝛾2𝜉 + (−𝛽𝜖𝜆 + 𝜆2 − 2𝛽𝜉)𝜔)/(𝛽(2𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔)).
Then we can obtain:
𝜃𝑊
∗ = 𝛾𝜉(𝑣𝛽 − 𝜙)/(2𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔)
𝑝𝑊
∗ = (𝜙(𝛾2𝜉 + 𝛽(𝛽𝜖2 − 𝜖𝜆 − 3𝜉)𝜔) + 𝑣𝛽(𝛾2 𝜉 + (𝜆2 − 𝛽(𝜖𝜆 + 𝜉))𝜔))/𝛽(2𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔)
𝑑𝑊
∗ = 𝛽𝜉(𝑣𝛽 − 𝜙)𝜔/(2𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔)
𝜋𝑊
𝐸∗ = 𝜉2(𝜙 − 𝑣𝛽)2𝜔(−𝛾2 + 2𝛽𝜔)/ 2(2𝛾2𝜉 + (𝛽2 𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔)2
𝜋𝑊
𝐹∗ = −𝜉(𝜙 − 𝑣𝛽)2𝜔/2(2𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔)
𝜋𝑊
𝑇∗ = −𝜉(𝜙 − 𝑣𝛽)2𝜔(3𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 3𝜉))𝜔)/2(2𝛾2𝜉 + (𝛽2𝜖2 + 𝜆2 − 2𝛽(𝜖𝜆 + 2𝜉))𝜔)2
3.3 Revenue sharing contract model
Revenue sharing contract is that the farmer sell their products to the manufacturer below the cost, the
manufacturer in order to compensate the farmer’s losses, return its sales income according to a certain
proportion (0<ρ<1) (agreed upon by both parties) to the farmer, ultimately ensure that the revenue of the two
sides level higher than decentralized control condition, achieve the supply chain optimal performance. So we
express the profits of the green SC member as follows:
𝜋𝑅
𝐸 (𝑝, 𝜃) = (1 − 𝜌)((𝑝 − 𝑣 − 𝜖𝑔)(𝜙 − 𝛽𝑝 + 𝜆𝑔 + 𝛾𝜃)) − 𝜔 𝜃2 2⁄ (15)
𝜋𝑅
𝐹 (𝜌, 𝑔) = 𝜌((𝑝 − 𝑣 − 𝜖𝑔)(𝜙 − 𝛽𝑝 + 𝜆𝑔 + 𝛾𝜃)) − 𝜉 𝑔2 2⁄ (16)
Because of enterprise apply the acquisition to obtain green agricultural products, so the farmer takes the
enterprise’s reaction into consideration when chooses its strategy. The enterprise’s reaction function for a
given (w,g) can be derived from the first-order derivative of 𝜋𝑅𝐸 in Eq.(15):
𝜕𝜋𝑅
𝐸 /𝜕𝜃 = −𝛾(𝑝 − 𝑣 − 𝑔𝜖)(−1 + 𝜌) − 𝜃𝜔 = 0 (17)
𝜕𝜋𝑅
𝐸 /𝜕𝑝 = (−1 + 𝜌)(2𝑝𝛽 − 𝑣𝛽 − 𝑔𝛽𝜖 − 𝛾𝜃 − 𝑔𝜆 − 𝜙) = 0 (18)
Since𝜕2𝜋𝑅𝐸 𝜕𝜃2⁄ = −𝜔 < 0,𝜕2𝜋𝑅𝐸 𝜕𝑝2⁄ = 2𝛽(−1 + 𝜌) < 0, note that the Hessian of 𝜋𝑅𝐹 is negative definite for all
values of 𝜃 and 𝑝 if (−1 + 𝜌)(𝛾2(−1 + 𝜌) + 2𝛽𝜔) > 0. Solving Eqs.(17)~(18), we can get:
𝜃𝑅
∗ = 𝛾(−1 + 𝜌)(𝑣𝛽 + 𝑔𝛽𝜖 − 𝑔𝜆 − 𝜙)/(𝛾2(−1 + 𝜌) + 2𝛽𝜔) (19)
𝑝𝑅
∗ = (𝜙𝜔 + 𝑣(𝛾2 (−1 + 𝜌) + 𝛽𝜔) + 𝑔(𝛾2𝜖(−1 + 𝜌) + (𝛽𝜖 + 𝜆)𝜔))/𝛾2(−1 + 𝜌) + 2𝛽𝜔 (20)
After substituting (19),(20) into (16), according to its first order derivatives with respect to 𝑤 and 𝑔 respectively:
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𝜕𝜋𝑅
𝐹 /𝜕𝑔 = 0 (21)
𝜕𝜋𝑅
𝐹 /𝜕𝜌 = 0 (22)
We can find optimal Revenue sharing proportion and green level of the famer by solving Eqs.(21) and (22):
𝜌𝑅
∗ = −1 + 2𝛽𝜔/𝛾2 (23)
Because 0<ρ<1, so βω<γ2<2βω should be established.
𝑔𝑅
∗ = −𝛽(𝛽𝜖 − 𝜆)(𝑣𝛽 − 𝜙)𝜔2/(2𝛾4𝜉 − 4𝛽𝛾2 𝜉𝜔 + 𝛽(−𝛽𝜖 + 𝜆)2𝜔2) (24)
Then we can obtain:𝜃𝑅∗ , 𝑝𝑅∗ , 𝑑𝑅∗ ,𝜋𝑅𝐸∗,𝜋𝑅𝐹∗ ,𝜋𝑅𝑇∗.
4. Results discussion
4.1 Green level
Proposition 1: When 𝛾 < √𝛽𝜔, 𝑔𝑇∗ > 𝑔𝑊∗ > 𝑔𝑅∗ ;when 𝛾 > √𝛽𝜔, 𝑔𝑇∗ > 𝑔𝑅∗ > 𝑔𝑊∗ .
Proof: Omitted.
Proposition 1 shows that the green level of agricultural products is the highest in the centralized decision
model. In the decentralized decision model, the green level is determined by the relationship between γ2 and
βω. When γ2< βω, the green level of wholesale contract model is higher than the green level of revenue
sharing contract model, while the result is the opposite whenγ2> βω. Simulation figure 1 confirms
this(ϕ=10000).
Figure 1: Green level vary with parameter λ,β and γ(β=30,v=20,ϵ=0.1,γ=20,ξ=8,ω=10)
Proposition 2: 𝑑𝑔𝑇∗ /𝑑𝜆 > 0, 𝑑𝑔𝑊∗ /𝑑𝜆 > 0, 𝑑𝑔𝑅∗ /𝑑𝜆 > 0; 𝑑𝑔𝑇∗ /𝑑𝛽 < 0, 𝑑𝑔𝑊∗ /𝑑𝛽 < 0, 𝑑𝑔𝑅∗ /𝑑𝛽 < 0;
𝑑𝑔𝑇
∗ /𝑑𝛾 > 0, 𝑑𝑔𝑊∗ /𝑑𝛾 > 0, 𝑑𝑔𝑅∗ /𝑑𝛾 > 0 if 𝛾 > √𝛽𝜔;𝑑𝑔𝑇∗ /𝑑𝛾 > 0, 𝑑𝑔𝑊∗ /𝑑𝛾 > 0, 𝑑𝑔𝑅∗ /𝑑𝛾 < 0 if 𝛾 < √𝛽𝜔.
Proof: Omitted.
From proposition 2 we can know that, with the increase of the demand responsiveness to green SC’s green
level, the green level increases gradually, which means that consumer are more sensitive to green level, then
the higher of product green level. With the increase of the demand responsiveness to green SC’s product
price, the green level decreases gradually. It denotes that the higher the consumer price sensitivity, the
product of the green level will be reduced. Simulation figure 1 confirms the proposition.
4.2 Quality effort level
Proposition 3: θT>θW>θR.
Proof: Omitted.
Proposition 4: 𝒅𝜽𝑻
∗ /𝒅𝜷 < 𝟎,𝒅𝜽𝑾
∗ /𝒅𝜷 < 𝟎,𝒅𝜽𝑹
∗ /𝒅𝜷 < 𝟎;
𝒅𝜽𝑻
∗ /𝒅𝜸 > 𝟎,𝒅𝜽𝑾
∗ /𝒅𝜸 > 𝟎,𝒅𝜽𝑹
∗ /𝒅𝜸 > 𝟎;
𝒅𝜽𝑻
∗ /𝒅𝝀 > 𝟎,𝒅𝜽𝑾
∗ /𝒅𝝀 > 𝟎, 𝒅𝜽𝑹
∗ /𝒅𝝀 > 𝟎 , if 𝜸 > √𝜷𝝎;
𝒅𝜽𝑻
∗ /𝒅𝝀 > 𝟎,𝒅𝜽𝑾
∗ /𝒅𝝀 > 𝟎, 𝒅𝜽𝑹
∗ / 𝒅𝝀 < 𝟎, if 𝜸 < √𝜷𝝎.
Proof: Omitted.
These two propositions indicate that the manufacturer's effort to improve the level of the green level, is largest
in the concentration decision model, while it is the smallest in the revenue sharing contract model. With the
increase of the demand responsiveness to green SC’s product price, the manufacturer's effort decreases
gradually. With the increase of the demand responsiveness to green SC’s effort level, the manufacturer's
effort increases gradually. Simulation figure 2 confirms the propositions.
11 12 13 14 15
500
1000
1500
2000
2500
g
26 28 30 32 34
1000
500
500
1000
1500
2000
g
16 17 18 19 20
200
400
600
800
1000
g
g T
g W
g R
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Figure 2: Quality effort level vary with parameter λ,β and γ(β=30,v=20,ϵ=0.1,γ=20,ξ=8,ω=10)
4.3 Profits
Proposition 5: 𝜋𝑇𝑇∗ > 𝜋𝑊𝑇∗ >𝜋𝑅𝑇∗ ;𝑑𝜋𝑇𝑇∗/ 𝑑𝜆 > 0,𝑑𝜋𝑊𝑇∗/𝑑𝜆 > 0,𝑑𝜋𝑅𝑇∗/𝑑𝜆 > 0;𝑑𝜋𝑇𝑇∗/𝑑𝛽 < 0,𝑑𝜋𝑊𝑇∗/𝑑𝛽 < 0 ,𝑑𝜋𝑅𝑇∗/𝑑𝛽 <
0; 𝑑𝜋𝑇𝑇∗/𝑑𝛾 > 0,𝑑𝜋𝑊𝑇∗/𝑑𝛾 > 0,𝑑𝜋𝑅𝑇∗/𝑑𝛾 > 0.
Proof: Omitted.
Figure 3: Total profits vary with parameter λ,β and γ(β=30,v=20,ϵ=0.1,γ=20,ξ=8,ω=10)
Proposition 5 shows that the total profits is the highest in the centralized decision model. In the decentralized
decision model, the total profits of wholesale contract model is higher than the total profits of revenue sharing
contract model. The increase of λ and γ are helpful to the increase of the total profit. Simulation figure 3
verifies these conclusions.
Proposition 6: 𝜋𝑊𝐹∗ < 𝜋𝑅𝐹∗, if 𝛾 < √𝛽𝜔;
𝜋𝑊
𝐹∗ > 𝜋𝑅
𝐹∗, if 𝛾 > √𝛽𝜔;
𝑑𝜋𝑊
𝐹∗/𝑑𝜆 > 0,𝑑𝜋𝑅𝐹∗/𝑑𝜆 >0;
𝑑𝜋𝑊
𝐹∗/𝑑𝛽 < 0,𝑑𝜋𝑅𝐹∗/𝑑𝛽 <0;
𝑑𝜋𝑊
𝐹∗/𝑑𝛾 > 0, 𝑑𝜋𝑅
𝐹∗/𝑑𝛾 < 0, if 𝛾 < √𝛽𝜔;𝑑𝜋𝑅𝐹∗/𝑑𝛾 > 0, if 𝛾 > √𝛽𝜔.
Proof: Omitted.
As can be seen from proposition 6, for the farmer, the use of which kind of contract depends on the
relationship between γ and √𝛽𝜔. The increase of λ is beneficial to the increase of farmer's profits, while the
increase of β is not conducive to the increase of farmer's profits. In the wholesale price contract model, γ
increasing is beneficial to the improvement of farmer's profits; in the revenue sharing contract, when 𝛾 < √𝛽𝜔,
γ increased which leads to the reduction of farmer's profits. When 𝛾 > √𝛽𝜔, farmer's profits increased with
the increasing of γ. Figure 4 verifies the above conclusions.
Figure 4: Farmer’s profits vary with parameter λ, β and γ (β=30, v=20, ϵ=0.1, γ=20, ξ=8, ω=10)
Proposition 7: 𝜋𝑊𝐸∗ > 𝜋𝑅𝐸∗; 𝑑𝜋𝑊𝐸∗/𝑑𝜆 > 0,𝑑𝜋𝑅𝐸∗/𝑑𝜆 > 0; 𝑑𝜋𝑊𝐸∗/𝑑𝛽 < 0,𝑑𝜋𝑅𝐸∗/𝑑𝛽 < 0; 𝑑𝜋𝑊𝐸∗/𝑑𝛾 > 0,𝑑𝜋𝑅𝐸∗/𝑑𝛾 > 0.
4 6 8 10 12 14
500
1000
1500
2000
26 28 30 32 34
2000
1000
1000
2000
3000
4000
12 14 16 18 20
500
500
1000
1500
6 8 10 12 14
1 10 6
2 10 6
3 10 6
4 10 6
5 10 6
6 10 6
T
26 28 30 32 34
5 10 6
1 10 7
T
16 17 18 19 20
1 10 6
2 10 6
3 10 6
4 10 6
T
11 12 13 14 15
500000
1.0 10 6
1.5 10 6
2.0 10 6
F
26 28 30 32 34
500000
1.0 10 6
1.5 10 6
2.0 10 6
2.5 10 6
3.0 10 6
3.5 10 6
F
16 17 18 19 20
200000
400000
600000
800000
1.0 10 6
1.2 10 6
1.4 10 6
F
T
W
R
T
T
W
T
R
T
W
F
R
F
935
Proof: Omitted.
Figure 5: Enterprise’s profits vary with parameter λ,β and γ(β=30,v=20,ϵ=0.1,γ=20,ξ=8,ω=10)
As can be seen from proposition 7, the enterprise’s profits in the wholesale price contract model is higher. The
increase of λ is beneficial to the increase of enterprise’s profits, the increase of β is not conducive to the
increase of enterprise’s profits. γ increasing is beneficial to the improvement of enterprise’s profits. Figure 5
verifies the above conclusions.
5. Conclusion
In this paper, the problem of the price and the green level of green supply chain of agricultural products is set
up by the game theory, the three models of centralized decision-making, wholesale price contract and revenue
sharing contract are analyzed. Results show that the agricultural products green level and the total income in
the centralized decision-making model are the highest. The size of the green level and farmer’s profits in the
decentralized decision model are determined by the relationship between the parameters of demand
responsiveness to green SC’s own price, demand responsiveness to enterprise effort level and enterprise
effort costs. The enterprise’s profits in the wholesale price contract model is higher.
Acknowledgments
This work is supported by Guizhou Natural Science Foundation Project ((2014) 264).
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11 12 13 14 15
500000
1.0 10 6
1.5 10 6
E
26 28 30 32 34
1 10 6
2 10 6
3 10 6
4 10 6
5 10 6
6 10 6
E
16 17 18 19 20
500000
500000
1 10 6
E
W
E
R
E
936