Using game theory for analysing pricing models in closed-loop supply chain from short- and long-term perspectives

Abstract

Closed-loop supply chain (CLSC) management is an environmental approach to supply chain management that aims to prevent hazardous material from entering the nature by means of creating a reverse flow. This paper studies the short-and long-term behaviour of agents in implementing the appropriate collecting strategy in a two-echelon CLSC. In short-term, based on the Stackelberg game, several novel pricing models for different collecting strategies are proposed and compared. Then, the optimal policies of the pricing decisions are determined for each model. The long-term behaviour of companies in implementing collecting process is examined by evolutionary game theory and the most stable strategy is selected. Furthermore, a numerical example is presented to compare the different collecting structures. Finally, a managerial insight is provided to indicate the effect of key parameters such as remanufacturing rate, marketing elasticity and government subsidies on selecting the appropriate strategy.

Game theory applications in production research in the sharing and circular economy era

“…Choi (2016) study the supply chain coordination challenge with a single manufacturer and many risk averse (Chiu and Choi 2016;Chiu et al 2018;Chiu, Chan, and Choi 2019;Choi et al 2019b) retailers using the Stackelberg gaming scenario. Esmaeili, Allameh, and Tajvidi (2016) apply the game theory to study optimal pricing decisions in closed-loop supply chain systems. Wu, Li, and Shi (2017) explore the deployment of a two-part tariff contract for supply chain operations under information asymmetry.…”

The Evolutionary Game Theoretic Analysis for Emission Reduction and Promotion in Low-Carbon Supply Chains

“…Recently, there have been many scholars studying evolutionary problems of long-term cooperation among supply chain enterprises. There are researches most relevant to ours, such as general evolutionary game applications [37,38] and evolutionary game in environmental supply chain management [31,[39][40][41]. Although these mentioned literature refers to evolutionary game applications in supply chain operations, few of them explores the cooperative problem of long-term emission reduction and low-carbon promotion while considering free-riding behavior.…”

Closed‐loop supply chain network static equilibrium and dynamics under pollution permits system

“…Esmaeili et al . studied the collection behavior of players in a two echelon CLSC and developed pricing models for different collecting strategies. Panda et al .…”

“…Zhang and Ren [19] employed an integrated view to study the CLSC coordination strategy for the remanufacture of patented products under competitive demand. Esmaeili et al [20] studied the collection behavior of players in a two echelon CLSC and developed pricing models for different collecting strategies. Panda et al [21] studied the effects of social responsibility for used product recovery and gave revenue sharing contract for CLSC.…”