A game theoretic approach for pricing, recycling management and social responsibility of companies in an online to offline close loop supply chain

Articles in Press

Document Type : Industry Article

Authors

1 Department of Industrial and Systems Engineering, Isfahan University of Technology, Isfahan 84156-83111, Iran

2 Department of Computer and Industrial Engineering, Birjand University of Technology, Birjand 97198-66981, Iran,

Abstract

Improving the environmental behavior of manufacturers plays a crucial role in mitigating harmful environmental impacts and enhancing social welfare. This study models a closed-loop supply chain of the online-to-offline type, consisting of a manufacturer and a retailer, where decisions are made within the framework of a Stackelberg game. The manufacturer is responsible for setting the level of product greenness and investing in corporate social responsibility, while the retailer handles product pricing and the collection of used products at the end of their life cycle. Market demand is considered a function of product price, greenness, and the extent of the firm's social responsibility. The model is examined across four scenarios both with and without government intervention, and under centralized and decentralized decision-making structures. The findings reveal that centralized supply chain structures lead to higher levels of environmental and CSR performance, thereby contributing more effectively to social welfare compared to decentralized systems. Moreover, government intervention through minimum thresholds for product greenness and CSR enhances environmentally conscious decision-making and plays a significant role in aligning corporate economic goals with broader social objectives.The results indicate that in the presence of effective regulatory policies, firms are more inclined to invest in sustainability and responsible practices. From a managerial perspective, companies that adopt centralized decision-making and collaborate with regulatory bodies are more likely to achieve sustainable and accountable economic performance. For policymakers, the insights from this study can inform the development of more effective regulatory and incentive-based frameworks to promote CSR and sustainability throughout the CLSC.

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Journal of Modeling in Engineering

Articles in Press, Accepted Manuscript
Available Online from 14 September 2025

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History

  • Receive Date: 27 August 2024
  • Revise Date: 02 July 2025
  • Accept Date: 18 August 2025

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