Stackelberg game model of green tourism supply chain with governmental subsidy

Abstract

Green tourism has become a hot issue in both academic fields and companies recently. A green tourism supply chain composed of a government, a green scenic area and a travel agency is addressed using the game theory. The scenic area in the supply chain sells tickets to tourists through the travel agency, and makes extra investment on environmental protection to improve its green degree. The government provides financial subsidy to the green scenic area maximizing both the total social welfare and environmental improvements. Two Stackelberg game models of the green tourism supply chain, without and with the governmental subsidy, are built and solved by the backward induction method. The theoretical analyses indicate that the governmental subsidy can increase the demand of green tourism, and enhance the total social welfare and environmental protection level of the whole supply chain.