A Game Theoretic Approach for Eco-Design and Remanufacturing Considering Take-Back Policy

Xiaoxiao Chang, Guangye Xu, Qian Wang and Yongguang Zhong
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Xiaoxiao Chang: School of Economics and Management, Lanzhou University of Technology, Lanzhou 730050, China
Guangye Xu: School of Management, Nanjing University of Posts and Telecommunications, Nanjing 210003, China
Qian Wang: Business School, Qingdao University, Qingdao 266071, China
Yongguang Zhong: Business School, Qingdao University, Qingdao 266071, China

Sustainability, 2020, vol. 12, issue 17, 1-21

Abstract: This paper mainly aims at investigating the governments’ take-back policy of penalty or subsidy that motivates eco-design or remanufacturing. For this purpose, we consider a two-stage Stackelberg game between a government and a manufacturer. The government first decides to impose a take-back penalty or offer a take-back subsidy, and then the manufacturer selects to remanufacture or invest in eco-design as a response to the take-back policy. Upon analyzing and comparing game equilibrium, we find that the government prefers to offer a subsidy policy for eco-design and to impose a penalty policy for remanufacturing. The manufacturer will decide on investing in eco-design when the monetary value of the environmental impact of landfill and eco-design coefficient is medium. However, if the eco-design coefficient is high, the manufacturer practices remanufacturing instead of eco-design whether penalized and subsidized. The present study provides a set of guidelines in practical managerial recommendations for governments and manufacturers.

Keywords: eco-design; remanufacturing; social welfare; take-back policy; game theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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