Considering environmental implications of distribution channel choices: A comparative study based on game theory

Recently, with the rapid development of e-commerce in the world, the total scale of online-shopping has reached a notably high level. The environmental benefits of online retailing have been highlighted in many studies, but many factors could have contributed to opposing results. Motivated by the new sharp expansion of online shopping in China, we employ a game-theoretic based model to make a comparative study of the environment impacts of single-channel (traditional retail channel) and dual-channel (online direct channel and traditional retail channel) supply chains, by taking product characteristics, customers’ distribution range and propensities into account. To the best of our knowledge, no previous researchers have considered these factors simultaneously. Numerical analyses are applied to illustrate the model and demonstrate the influences of these factors on channel selection decisions and their resulting effects on the environment. Our results provide a reference for companies to decide whether to add an online direct channel for a specific product. The conclusions can also benefit the government in guiding companies to distribute products in more eco-friendly ways.