Power Structure Symmetry and Strategic Green Design in Supply Chains: Environmental and Economic Implications

This study explores the impact of symmetric and asymmetric channel power structures on green design decisions in supply chains, incorporating consumer environmental awareness (CEA). We develop a game-theoretic framework involving a manufacturer and a retailer under three distinct power configurations: manufacturer-led, retailer-led, and Nash game (symmetric power). The models examine how variations in power symmetry influence the manufacturer’s incentives to invest in green design, and their effects on pricing, demand, profit, and environmental performance. Our findings reveal that asymmetric power structures can significantly distort green design incentives. Specifically, green design does not always lead to higher prices or reduced environmental impact, depending on the interplay between power structure, investment cost, and CEA. Moreover, symmetric (Nash game) structures tend to improve overall supply chain performance when the green investment cost is high, while retailer-led structures are more effective under low-cost scenarios. Interestingly, unless green design significantly reduces per-unit environmental impact, the total environmental benefit may be offset by increased demand, highlighting the risk of a “green consumption trap”.