Empirical study on long-term dynamic coordination of green building supply chain decision-making under different subsidies

Abstract The level of cooperation between the subjects of a green building (GB) supply chain and government subsidies can effectively influence decisions of subjects of the supply chain. However, it is unclear how effective the supply chain coordination is under government subsidies. This study constructed a differential game model of a supply chain composed of developers and contractors under government participation from the perspective of long-term and dynamic operation, emphasising the introduction of price variables, defining the GB greenness and goodwill as state variables, considering how the GB greenness and goodwill affect demand, and analysing the developers' and contractors' decision making and cost bearing in the presence of non-government subsidies (NGS), lump-sum government subsidies (LGS), and unit government subsidies (UGS). This study concluded that: 1) Both LGS and UGS can increase the developers' effort degree and GB goodwill, while improvement of the developers' efforts and GB goodwill depends on the quantitative relationship between LGS and UGS. 2) Whether the contractors' effort degree and GB greenness can be improved depends on the relationship between the amount of UGS and other factors. 3) Under LGS, the developers' optimal cost-bearing ratio to the contractors' is greater than that under UGS. 4) UGS can reduce the selling price of GB. 5) The more sensitive the GB goodwill is to the developers' efforts, the better the effect on improving the GB goodwill. Consumers' awareness of GBs affects the developers’ income. The game structure designed in this study has important managerial significance and practical applications.