A game-theoretic approach for the government’s leadership to reduce misconduct in business

¹ School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran
² School of Industrial Engineering, Islamic Azad University, South Tehran Branch, Tehran, Iran
³ Department of Industrial Engineering, Yonsei University, 50 Yonsei-ro, Sinchon-dong, Seodaemun-gu, Seoul 03722, South Korea
⁴ Department of Mathematics, Lovely Professional University, Phagwara, Punjab 144411, India
⁵ Center for Global Health Research, Saveetha Medical College, Saveetha Institute of Medical and Technical Sciences, Saveetha University, Chennai, Tamil Nadu 600077, India

^* Corresponding author: bsbiswajitsarkar@gmail.com

Received: 25 April 2024
Accepted: 10 April 2025

Abstract

Climate change forces the government to regulate policies in society furthermore, it has been proven that e-commerce is more carbon-efficient than traditional retail, so encouraging manufacturers to implement sustainable practices needs the effort of the government. The main issue of dual-channel is pricing. This study investigates the impact of government intervention on decision-making in the highly polluting leather industry, particularly within a dual-channel supply chain structure. To investigate the optimal decision between retailer and manufacturer in the dual-channel supply chain with government intervention, this study compares the effect of coordination contracts. In this model, the government, as a leader of the market, considers policy for the welfare of society. Maximizing the community’s well-being based on consumer surplus. This policy determines how much a customer pays for the tax of buying the green product. Green manufacturers open an online channel selling part of green products beside the retailer (offline channel). The result shows that a low-carbon contract is an effective mechanism to maximize social welfare and increase supply chain members’ profit. In the low-carbon contract, the decrease in the wholesale price causes the demand from offline channels to increase. In addition, low-carbon contracts have a powerful impact on the decrease in taxes paid by customers. Notably, reverse revenue and greening cost sharing, among other contracts, can increase the online demand for green manufacturers, while profit-sharing contracts can balance online and offline channels in the supply chain.