This paper researches the pricing strategy and government intervention
mechanism for green supply chain in monopoly market, while considering strategic
customer behavior. According to optimization theory, it establishes the target
functions of retailer and strategic customers and investigates the interactions
between retailer and strategic customers in accordance with Stackelberg's game
theory, so as to confirm the optimal discount level for green products. In addition,
it discusses the regulatory effect of government intervention, including the guiding
price and fiscal subsides, on the sales of green products. The research shows that
the retailer can make the profit maximization by adjusting the discount level;
the governments can regulate the sales of products by implementing the guiding
price and fiscal subsides to the retailer.