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Environmental-regulation pricing strategies for green supply chain management

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  • Chen, Yenming J.
  • Sheu, Jiuh-Biing

Abstract

This paper demonstrates that a proper design of environmental-regulation pricing strategies is able to promote Extended Product Responsibility for green supply chain firms in a competitive market. A differential game model comprising Vidale-Wolfe equation has been established in light of sales competition and recycling dynamics as well as regulation related profit function. Analytic solutions of Markovian Nash equilibriums are provided with the necessary condition derived from Hamilton-Jacobi-Bellman equations. We found that governments should opt to gradually raise regulation standards so that rational manufacturers will gradually improve its product recyclability, and, in turn, Extended Product Responsibility will get promoted.

Suggested Citation

  • Chen, Yenming J. & Sheu, Jiuh-Biing, 2009. "Environmental-regulation pricing strategies for green supply chain management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(5), pages 667-677, September.
    • Handle: RePEc:eee:transe:v:45:y:2009:i:5:p:667-677
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    More about this item

    Keywords

    Extended Production Responsibility Differential game Optimal control;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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