How Retailer Co-Opetition Impacts Pricing, Collecting and Coordination in a Closed-Loop Supply Chain

Xinyi Li, Guoxuan Huang, Jie Chu, Benrong Zheng and Kai Huang
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Xinyi Li: College of Economics & Management, Huazhong Agricultural University, Wuhan 430070, China
Guoxuan Huang: Research Center of Hubei Logistics Development, Hubei University of Economics, Wuhan 430205, China
Jie Chu: International Business School Suzhou, Xi’an Jiaotong-Liverpool University, Suzhou 215123, China
Benrong Zheng: College of Economics & Management, Huazhong Agricultural University, Wuhan 430070, China
Kai Huang: DeGroote School of Business, McMaster University, Hamilton, ON L8S4M4, Canada

Sustainability, 2021, vol. 13, issue 18, 1-25

Abstract: The cooperative and competitive (i.e., co-opetition) behavior between retailers plays a significant role in the development of operations and marketing strategies in a supply chain. Specifically, retailers’ co-opetition relationship pivotally influences the sustainable performance in a closed-loop supply chain. This study examines the impact of retailer co-opetition on pricing, collection decisions and coordination in a closed-loop supply chain with one manufacturer and two competing retailers. Based on observations in some industries (e.g., electronic manufacturing, fabric and textile, etc.), the cooperative and competitive relationships between retailers can be classified into the following three different modes: Bertrand competition, Stackelberg competition, and Collusion. In this paper, we establish a centralized and three decentralized game-theoretic models under these three co-opetition modes and characterize the corresponding equilibrium outcomes. The results indicate that the Bertrand competition mode yields the highest return rate, which is also superior to the other two modes for both the manufacturer and the supply chain system in terms of profitability. However, it can be shown that which mode benefits the retailers would depend on the degree of competition between the retailers and the relative remanufacturing efficiency. Interestingly, we find that the retailer’s first-move advantage does not necessarily lead to higher profits. In addition, we design a modified two-part tariff contract to coordinate the decentralized closed-loop supply chains under three different retailer co-opetition modes, and the results suggest that the optimal contractual parameters in the contracts highly rely on the remanufacturing efficiency and the competition degree between the two retailers. Several managerial insights for firms, consumers and policy makers are provided through numerical analysis.

Keywords: retailer competition and cooperation; closed-loop supply chain; pricing; collecting; supply chain coordination (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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