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A Game Theoretic Approach for Eco-Design and Remanufacturing Considering Take-Back Policy

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  • Xiaoxiao Chang

    (School of Economics and Management, Lanzhou University of Technology, Lanzhou 730050, China)

  • Guangye Xu

    (School of Management, Nanjing University of Posts and Telecommunications, Nanjing 210003, China)

  • Qian Wang

    (Business School, Qingdao University, Qingdao 266071, China)

  • Yongguang Zhong

    (Business School, Qingdao University, Qingdao 266071, China)

Abstract

This paper mainly aims at investigating the governments’ take-back policy of penalty or subsidy that motivates eco-design or remanufacturing. For this purpose, we consider a two-stage Stackelberg game between a government and a manufacturer. The government first decides to impose a take-back penalty or offer a take-back subsidy, and then the manufacturer selects to remanufacture or invest in eco-design as a response to the take-back policy. Upon analyzing and comparing game equilibrium, we find that the government prefers to offer a subsidy policy for eco-design and to impose a penalty policy for remanufacturing. The manufacturer will decide on investing in eco-design when the monetary value of the environmental impact of landfill and eco-design coefficient is medium. However, if the eco-design coefficient is high, the manufacturer practices remanufacturing instead of eco-design whether penalized and subsidized. The present study provides a set of guidelines in practical managerial recommendations for governments and manufacturers.

Suggested Citation

  • Xiaoxiao Chang & Guangye Xu & Qian Wang & Yongguang Zhong, 2020. "A Game Theoretic Approach for Eco-Design and Remanufacturing Considering Take-Back Policy," Sustainability, MDPI, vol. 12(17), pages 1-21, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:17:p:7174-:d:407870
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    References listed on IDEAS

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