Abstract: This paper studies the channel encroachment of manufacturers under the cost sharing strategy of retailers in green supply chains. Game models under different strategy combinations are established to obtain equilibrium solutions of the models. In addition, the equilibrium strategies of both sides and their influences are analyzed. It is found that retailers will not adopt cost sharing strategies in the case of manufacturer channel encroachment, and the profits of retailers are always damaged by manufacturer channel encroachment. When manufacturers do not engage in channel encroachment, whether retailers adopt cost sharing strategies is related to their proportion of cost sharing. Manufacturers always choose channel encroachment when the fixed direct selling cost is low, and give up channel encroachment otherwise. However, when the fixed direct selling cost is moderate, the encroachment strategy of manufacturers is dependent on whether retailers adopt cost sharing strategies. Manufacturers may abandon channel encroachment to enable retailers to share the cost, and then, a win-win situation is achieved. Expansion analysis show that in the case of retailers providing cost sharing contracts, the profits of manufacturers and retailers are improved when the fixed direct selling cost is moderate, where a "triple win" of manufacturers, retailers and product green levels may be realized.

Key words: green supply chain, cost sharing, channel encroachment, equilibrium strategy