Pricing and Incentive Strategy for Green Building Supply Chain with Incentive Mechanism

Abstract

We are witnessing more frequent extreme weather events due to the global warming. Construction industry has a high carbon footprint, the development of green building is a necessary way to protect the environment and achieve sustainable development of construction Industry. The government has formulated a series of financial subsidies policies and tax preferential policies to promote the development of green buildings. Contractors play an important role in the construction process, but there is no incentive mechanism to encourage contractors to work hard to improve the green building level. This paper studies the incentive mechanism and pricing strategy of green building under a two-level supply chain system consisting of a developer and a contractor. The optimal incentive intensity and optimal price of the developer, and optimal green level of the contractor is obtained. The results show that the incentive mechanism can not only increase the profits of the developer and the contractor but also improve the green building level, then promote the sustainable development of the construction industry.