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Modelling decision behaviours in pricing game of closed-loop supply chains

Author

Listed:
  • Xiaohua Han

    (School of Management, Guangdong University of Technology, Guangzhou, China)

  • Bo Feng

    (School of Business Administration, South China University of Technology, Guangzhou, China)

  • Xujin Pu

    (School of Business, Jiangnan University, Wuxi, China)

Abstract

This paper experimentally and analytically studies pricing decisions in closed-loop supply chains. Experimental results show considerable deviations from theoretical predictions by traditional pricing models. Moreover, social relationships can affect decision results, and double marginalization is reduced in closed-loop supply chains. For in-depth analysis of experimental results, we further extended the quantal response equilibrium model by incorporating the fairness concerns of both the manufacturer and retailer. The analysis results of the developed model suggest that participants exhibit bounded rationality and fairness concerns when they make decisions. Social relationships can also influence the degree of fairness concerns.

Suggested Citation

  • Xiaohua Han & Bo Feng & Xujin Pu, 2015. "Modelling decision behaviours in pricing game of closed-loop supply chains," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 66(6), pages 1052-1060, June.
    • Handle: RePEc:pal:jorsoc:v:66:y:2015:i:6:p:1052-1060
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    Citations

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    Cited by:

    1. Yadong Shu & Ying Dai & Zujun Ma, 2019. "Pricing Decisions in Closed-Loop Supply Chains with Peer-Induced Fairness Concerns," Sustainability, MDPI, vol. 11(18), pages 1-19, September.
    2. Sarkar, Sumit & Bhala, Shrey, 2021. "Coordinating a closed loop supply chain with fairness concern by a constant wholesale price contract," European Journal of Operational Research, Elsevier, vol. 295(1), pages 140-156.
    3. Qi Wang & Kebing Chen & Shengbin Wang & Xiaogang Cao, 2022. "Optimal decisions in a closed-loop supply chain: fairness concerns, corporate social responsibility and information value," Annals of Operations Research, Springer, vol. 309(1), pages 277-304, February.
    4. Xigang Yuan & Fei Tang & Dalin Zhang & Xiaoqing Zhang, 2021. "Green Remanufacturer’s Mixed Collection Channel Strategy Considering Enterprise’s Environmental Responsibility and the Fairness Concern in Reverse Green Supply Chain," IJERPH, MDPI, vol. 18(7), pages 1-18, March.
    5. Ehsan Shekarian & Simme Douwe Flapper, 2021. "Analyzing the Structure of Closed-Loop Supply Chains: A Game Theory Perspective," Sustainability, MDPI, vol. 13(3), pages 1-32, January.
    6. Zhao, Lianxia & Guo, Wen & Fang, Shu-Cherng & An, Qi, 2024. "Enhancing supply chain coordination through transparency initiatives to mitigate product returns," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).

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