Abstract:Considering a dual-channel supply chain based on a differential game involving two competing manufacturers and one retailer, we study the optimal equilibrium strategies in both competition and cooperation models, and analyze how the key coefficients affect supply chain members' profits.The results suggest that, the cooperation between the two manufacturers will occur only if the emission reduction efficiency difference is limited, and the two manufacturers' total profits are higher, but their emission reduction efforts and advertising participation rates, as well as retailer's advertising efforts and profit are lower in the cooperation model. Furthermore, as the degree of customer loyalty to the retail channel increases and competition intensifies, retailer's profit in the competition model will increase, while the profit in the cooperation model is independent of advertising competition; the two manufactures' profits are both depending on their emission reduction efficiencies, direct channel and retail channel's marginal profits.