Influence of Retailer’s Fairness Concerns on Decision-Making of Dual Recycling Channel Closed-Loop Supply Chains

Abstract:

In this paper， the retailer’s fairness concern is taken into account in the dual recycling channel closed-loop supply chain， and three decision models considering retailer’s fairness concern are constructed， which are analyzed and solved by using the game theory. The influence of retailer’s fairness concern on the optimal strategy and performance of each channel member in different models is analyzed. A numerical simulation is conducted to verify the conclusions and for further discussion. The results reveal that the retailer’s fairness concern has a great effect on the optimal strategies for chain members， including optimal wholesale and retail prices of product， return rate of used items. Meanwhile， this behavior tendency can capture more excepted utilities for the retailer， but leads to the excepted utility reduction for the manufacturer and has different impacts on the expected utility of the third party. In addition， the influence of the retailer’s fairness concerns will exert different influences on the total expected utility of the three decision models.

Key words:closed-loop supply chain;dual recycling channel;fairness concern;Stackelberg game