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Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains
We argue that a Nash bargaining model with behavioral factors (i.e., fairness concern and risk aversion) should be introduced to the price strategizing process in the context of a closed-loop supply chain. We consider three different pricing models: The first is when both the manufacturer and the re...
Autores principales: | , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
MDPI
2018
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6313580/ https://www.ncbi.nlm.nih.gov/pubmed/30558220 http://dx.doi.org/10.3390/ijerph15122870 |
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author | He, Jianhong Zhang, Lei Fu, Xiao Tsai, Fu-Sheng |
author_facet | He, Jianhong Zhang, Lei Fu, Xiao Tsai, Fu-Sheng |
author_sort | He, Jianhong |
collection | PubMed |
description | We argue that a Nash bargaining model with behavioral factors (i.e., fairness concern and risk aversion) should be introduced to the price strategizing process in the context of a closed-loop supply chain. We consider three different pricing models: The first is when both the manufacturer and the retailer have fairness concerns; the second is when both the manufacturer and the retailer have risk aversion; and the final is when the manufacturer has risk aversion but the retailer has both risk aversion and fairness concern. Then we examine the model with game theory. The results have shown that fairness and risk aversion change the optimal pricing strategy, which affects the expected profits of retailers and manufacturers. The impacts of two (relatively irrational) behavioral factors on the wholesale and retail prices of new products, the recycle price and recycle transfer price of the waste products, are not the same. For new products, the wholesale price is most affected by behavioral factors and the sales price scores second. For waste recycling products, the transfer price is most affected by behavioral factors and the recycle price scores second. When considering fairness and risk aversion in retail, fairness concern is good for both manufacturers and retailers. This innovative pricing strategy model adds implications for sustainability in supply chain operations. |
format | Online Article Text |
id | pubmed-6313580 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2018 |
publisher | MDPI |
record_format | MEDLINE/PubMed |
spelling | pubmed-63135802019-06-17 Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains He, Jianhong Zhang, Lei Fu, Xiao Tsai, Fu-Sheng Int J Environ Res Public Health Article We argue that a Nash bargaining model with behavioral factors (i.e., fairness concern and risk aversion) should be introduced to the price strategizing process in the context of a closed-loop supply chain. We consider three different pricing models: The first is when both the manufacturer and the retailer have fairness concerns; the second is when both the manufacturer and the retailer have risk aversion; and the final is when the manufacturer has risk aversion but the retailer has both risk aversion and fairness concern. Then we examine the model with game theory. The results have shown that fairness and risk aversion change the optimal pricing strategy, which affects the expected profits of retailers and manufacturers. The impacts of two (relatively irrational) behavioral factors on the wholesale and retail prices of new products, the recycle price and recycle transfer price of the waste products, are not the same. For new products, the wholesale price is most affected by behavioral factors and the sales price scores second. For waste recycling products, the transfer price is most affected by behavioral factors and the recycle price scores second. When considering fairness and risk aversion in retail, fairness concern is good for both manufacturers and retailers. This innovative pricing strategy model adds implications for sustainability in supply chain operations. MDPI 2018-12-14 2018-12 /pmc/articles/PMC6313580/ /pubmed/30558220 http://dx.doi.org/10.3390/ijerph15122870 Text en © 2018 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/). |
spellingShingle | Article He, Jianhong Zhang, Lei Fu, Xiao Tsai, Fu-Sheng Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains |
title | Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains |
title_full | Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains |
title_fullStr | Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains |
title_full_unstemmed | Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains |
title_short | Fair but Risky? Recycle Pricing Strategies in Closed-Loop Supply Chains |
title_sort | fair but risky? recycle pricing strategies in closed-loop supply chains |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6313580/ https://www.ncbi.nlm.nih.gov/pubmed/30558220 http://dx.doi.org/10.3390/ijerph15122870 |
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