Strategic interactions between firms green cooperation and sales mode selection

As e-commerce platforms become a dominant retail channel and environmental sustainability becomes an urgent managerial concern, firms increasingly face the dual challenge of coordinating green initiatives and selecting appropriate sales modes. Motivated by this practical issue, this paper investigates the strategic interplay between green cooperation and sales mode selection in a platform-based supply chain that comprises a manufacturer and an e-tailer, both engaged in green initiatives.We develop game-theoretic frameworks to examine howcooperation structures (non-cooperative vs. cooperative) and sales modes (wholesale vs. agency) influence firms’ outcomes.We find that green cooperation always raises the green effort levels and market demand, but its impact on each firm’s profitability depends on their green investment efficiencies. A win–win outcome from cooperation emerges when the manufacturer’s green investment efficiency lies in an intermediate range. Besides, one firm’s increasing investment efficiency might hurt itself due to the free-rider effects enjoyed by the other firm. Furthermore, green cooperation alters the manufacturer’s preference for sales modes. Without cooperation, when the e-tailer’s green investment efficiency is high enough, the manufacturer prefers wholesale mode at very low or very high commission rates and finds agency mode advantageous only at intermediate commission rates. However, with cooperation, agency mode becomes optimal at low commission rates and wholesale mode is preferable at high commission rates. These findings provide managerial insights for firms on when to pursue green cooperation and how to select the suitable sales mode.