Green Production Modes in Platform Supply Chains Under Eco-Label Policies: A Cost Structure Perspective

Abstract

This study investigates how heterogeneous green production modes affect operational decisions and welfare outcomes in platform-based supply chains under eco-label policies. We develop a model consisting of a manufacturer and a platform, in which the government sets a product green standard and provides a per-unit subsidy. We consider two representative green production modes: development-intensive green production (DIGP), characterized by fixed investment costs, and marginal cost-intensive green production (MIGP), characterized by variable production costs. Within a Stackelberg game framework, we derive the equilibrium pricing and commission decisions and compare the two modes in terms of the feasible operating region, profit distribution, and social welfare. We explicitly incorporate cost structure heterogeneity into the analysis and investigate its interaction with the platform commission mechanism and policy intervention. The results show that whether green costs enter pricing decisions as fixed investments or marginal costs systematically changes equilibrium outcomes through the double-markup relationship arising from the interaction between green production costs and platform commissions. Specifically, MIGP has a broader feasible operating region and generates relatively higher manufacturer profits, whereas platform profits are relatively insensitive to the choice of green production mode. Government subsidies play a nonlinear moderating role: MIGP generates higher social welfare at relatively low subsidy levels, whereas DIGP generates higher welfare at relatively high subsidy levels. The welfare-reversal threshold is jointly determined by the fixed-cost coefficient, variable-cost coefficient, and consumers’ green preferences. By incorporating cost structure heterogeneity into a platform-based analytical framework, this study contributes to the green supply chain literature by revealing how heterogeneous green production modes fundamentally alter operational decisions, profit distribution, and welfare outcomes under environmental regulation. The findings provide a theoretical basis for green operations mediated by platforms and offer practical guidance for designing effective eco-label and subsidy policies.