Abstract: The green innovation activities of manufacturers and suppliers in the supply chain are focused on, and the relationship between the characteristics of consumer behaviors and the level of green innovation efforts of members of the supply chain discussed, taking into account the consumer's green preferences on the market demand side and the reference price effect they cause. By constructing a differential game model of supply chain green innovation under the conditions of centralized decision-making, decentralized decision-making and cost sharing, the optimal green innovation effort level and profit of supply chain members under equilibrium conditions are respectively obtained, and the relevant conclusions analyzed through numerical simulation. Studies have shown that changes in consumer preference characteristics are an important factor that motivates supply chain members to make green innovation efforts. With the enhancement of consumer green preference characteristics, the cost-sharing contract has a more obvious Pareto improvement on the profits of supply chain nodes. At the same time, manufacturers can stimulate their green innovation enthusiasm by providing cost subsidies to suppliers, and when the relationship between the supplier’s marginal profit and the manufacturer’s marginal profit reaches a certain threshold, the incentive effect of this green innovation cost subsidy is more significant. Therefore, it is more possible to realize the optimal profit of the supply chain system based on green innovation.

Key words: supply chain, green innovation, green preference, reference price effect