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              <p>This paper considers a quantity-flexibility contract with green-sensitive demand in the automotive industry. The automobile manufacturer determines the green level, and the retailer determines the retail price. The authors apply game theory to build the models, optimize the green level for maximizing the automobile manufacturer’s profit, and optimize the retail price for maximizing the retailer’s profit. We consider the equilibrium decision between the green level and the retail price to maximize the supply chain’s profit. Furthermore, we conduct experiments to verify our analysis results. Interestingly, this study finds that it is optimal for the retailer in the decentralized case to charge a higher price when the green sensitivity increases. However, the optimal price in the centralized case is not necessarily monotonic when the demand is lower. The manufacturer should set a higher green level as the greening investment parameter increases.</p>
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