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Analysis of evolutionary game in structural formation of market power in remanufacturing supply chains

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ABSTRACT It is normal for enterprises to engage in remanufacturing nowadays. Nevertheless, the concern of enterprises and researchers is whether remanufacturers should compete for leadership in supply chains. Considering the… Click to show full abstract

ABSTRACT It is normal for enterprises to engage in remanufacturing nowadays. Nevertheless, the concern of enterprises and researchers is whether remanufacturers should compete for leadership in supply chains. Considering the WTP for new and remanufactured products differs, this article the evolutionary game theory model in three structures of leadership in supply chains. It investigates the processes of market evolution and choices of strategies when manufacturers and retailers compete or do not compete for leadership in the market. It has been shown in the case of market evolution, according to the 12 conditions formed from different prices that manufacturer and retailer have to pay for competing for leadership, there are five types of ultimate evolutionary stability about the choices of strategies. Further analyses show that these five different evolutionary stability results include nine different evolutionary paths. Analyses of examples further show the evolutionary processes and results in distinct circumstances. This article extends the application of the evolutionary game in remanufacturing supply chains in theory and provides some guidance for enterprises to make decisions when they consider whether they compete for leaders in remanufacturing supply chains in reality.

Keywords: supply; evolutionary game; market; remanufacturing supply; supply chains

Journal Title: Applied Economics
Year Published: 2018

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