IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v128y2019icp506-525.html
   My bibliography  Save this article

An evolutionary game theoretic model for analyzing pricing strategy and socially concerned behavior of manufacturers

Author

Listed:
  • Johari, Maryam
  • Hosseini-Motlagh, Seyyed-Mahdi
  • Rasti-Barzoki, Morteza

Abstract

With the growing consciousness of social sustainability, corporate social responsibility (CSR) has become a serious challenge to manufacturers. This paper analytically analyzes pricing strategy and long-term behavior of socially concerned manufacturers through a one-population evolutionary game theory. Considering two main strategies, i.e., non-CSR and CSR, we investigate what strategy will eventually be the best strategy for the manufacturers and which strategy will eventually be chosen by the majority of the manufacturers. Besides, analytical sensitivity analyses and managerial insights are derived which reveal that a socially concerned manufacturer can offer a higher price for its products compared to a profit-maximizing manufacturer.

Suggested Citation

  • Johari, Maryam & Hosseini-Motlagh, Seyyed-Mahdi & Rasti-Barzoki, Morteza, 2019. "An evolutionary game theoretic model for analyzing pricing strategy and socially concerned behavior of manufacturers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 506-525.
    • Handle: RePEc:eee:transe:v:128:y:2019:i:c:p:506-525
    DOI: 10.1016/j.tre.2019.07.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554519301279
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2019.07.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. ., 2001. "Corporate Governance in Islamic Banking," Chapters, in: Islamic Banking, chapter 7, Edward Elgar Publishing.
    2. Venegas, Bárbara B. & Ventura, José A., 2018. "A two-stage supply chain coordination mechanism considering price sensitive demand and quantity discounts," European Journal of Operational Research, Elsevier, vol. 264(2), pages 524-533.
    3. Jinhua Cui & Hoje Jo & Yan Li, 2015. "Corporate Social Responsibility and Insider Trading," Journal of Business Ethics, Springer, vol. 130(4), pages 869-887, September.
    4. Hsueh, Che-Fu, 2014. "Improving corporate social responsibility in a supply chain through a new revenue sharing contract," International Journal of Production Economics, Elsevier, vol. 151(C), pages 214-222.
    5. Cruz, Jose M. & Wakolbinger, Tina, 2008. "Multiperiod effects of corporate social responsibility on supply chain networks, transaction costs, emissions, and risk," International Journal of Production Economics, Elsevier, vol. 116(1), pages 61-74, November.
    6. Johari, Maryam & Hosseini-Motlagh, Seyyed-Mahdi & Nematollahi, Mohammadreza & Goh, Mark & Ignatius, Joshua, 2018. "Bi-level credit period coordination for periodic review inventory system with price-credit dependent demand under time value of money," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 270-291.
    7. Xiao, Tiaojun & Chen, Guohua, 2009. "Wholesale pricing and evolutionarily stable strategies of retailers with imperfectly observable objective," European Journal of Operational Research, Elsevier, vol. 196(3), pages 1190-1201, August.
    8. Tirole, Jean, 2001. "Corporate Governance," Econometrica, Econometric Society, vol. 69(1), pages 1-35, January.
    9. Ying Wu & Haiyan Li & Qinglong Gou & Jibao Gu, 2017. "Supply chain models with corporate social responsibility," International Journal of Production Research, Taylor & Francis Journals, vol. 55(22), pages 6732-6759, November.
    10. Karl Widerquist, 2018. "The Bottom Line," Exploring the Basic Income Guarantee, in: A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens, chapter 0, pages 93-98, Palgrave Macmillan.
    11. Ni, Debing & Li, Kevin W. & Tang, Xiaowo, 2010. "Social responsibility allocation in two-echelon supply chains: Insights from wholesale price contracts," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1269-1279, December.
    12. Milton Friedman, 2007. "The Social Responsibility of Business Is to Increase Its Profits," Springer Books, in: Walther Ch Zimmerli & Markus Holzinger & Klaus Richter (ed.), Corporate Ethics and Corporate Governance, pages 173-178, Springer.
    13. Sheu, Jiuh-Biing & Choi, Tsan-Ming, 2019. "Extended consumer responsibility: Syncretic value-oriented pricing strategies for trade-in-for-upgrade programs," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 350-367.
    14. Biswas, Indranil & Raj, Alok & Srivastava, Samir K., 2018. "Supply chain channel coordination with triple bottom line approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 213-226.
    15. Panda, Shibaji & Modak, Nikunja Mohan & Cárdenas-Barrón, Leopoldo Eduardo, 2017. "Coordinating a socially responsible closed-loop supply chain with product recycling," International Journal of Production Economics, Elsevier, vol. 188(C), pages 11-21.
    16. Panda, Shibaji, 2014. "Coordination of a socially responsible supply chain using revenue sharing contract," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 92-104.
    17. Fattahi, Mohammad & Govindan, Kannan, 2018. "A multi-stage stochastic program for the sustainable design of biofuel supply chain networks under biomass supply uncertainty and disruption risk: A real-life case study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 534-567.
    18. Choi, Tsan-Ming & Li, Yongjian & Xu, Lei, 2013. "Channel leadership, performance and coordination in closed loop supply chains," International Journal of Production Economics, Elsevier, vol. 146(1), pages 371-380.
    19. Li, Wei & Chen, Jing, 2018. "Pricing and quality competition in a brand-differentiated supply chain," International Journal of Production Economics, Elsevier, vol. 202(C), pages 97-108.
    20. Panda, S. & Modak, N.M. & Sana, S.S. & Basu, M., 2015. "Pricing and replenishment policies in dual-channel supply chain under continuous unit cost decrease," Applied Mathematics and Computation, Elsevier, vol. 256(C), pages 913-929.
    21. Bin Shen & Xiaoyan Xu & Tsan-Ming Choi, 2019. "Simplicity is beauty: pricing coordination in two-product supply chains with simplest contracts under voluntary compliance," International Journal of Production Research, Taylor & Francis Journals, vol. 57(9), pages 2769-2787, May.
    22. Riechmann, Thomas, 2001. "Genetic algorithm learning and evolutionary games," Journal of Economic Dynamics and Control, Elsevier, vol. 25(6-7), pages 1019-1037, June.
    23. Marcus Brandenburg & Tobias Rebs, 2015. "Sustainable supply chain management: a modeling perspective," Annals of Operations Research, Springer, vol. 229(1), pages 213-252, June.
    24. Yin-hua Yeh & Tsun-siou Lee & Tracie Woidtke, 2001. "Family Control and Corporate Governance: Evidence from Taiwan," International Review of Finance, International Review of Finance Ltd., vol. 2(1&2), pages 21-48.
    25. Hsueh, Che-Fu, 2015. "A bilevel programming model for corporate social responsibility collaboration in sustainable supply chain management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 84-95.
    26. Xiao, Tiaojun & Yu, Gang, 2006. "Supply chain disruption management and evolutionarily stable strategies of retailers in the quantity-setting duopoly situation with homogeneous goods," European Journal of Operational Research, Elsevier, vol. 173(2), pages 648-668, September.
    27. Safarzadeh, Soroush & Rasti-Barzoki, Morteza, 2019. "A game theoretic approach for pricing policies in a duopolistic supply chain considering energy productivity, industrial rebound effect, and government policies," Energy, Elsevier, vol. 167(C), pages 92-105.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pingkuo, Liu & Huan, Peng & Zhiwei, Wang, 2020. "Orderly-synergistic development of power generation industry: A China’s case study based on evolutionary game model," Energy, Elsevier, vol. 211(C).
    2. Li-cai Lei & Shang Gao & En-yu Zeng, 2020. "Regulation strategies of ride-hailing market in China: an evolutionary game theoretic perspective," Electronic Commerce Research, Springer, vol. 20(3), pages 535-563, September.
    3. Hongyang He & Bin Zhang, 2022. "Effective Synergy of Market Agents: The Core of Achieving Multi-Agent Governance on the Internet Platform," Sustainability, MDPI, vol. 14(24), pages 1-20, December.
    4. Zha, Yong & Wang, Yuting & Li, Quan & Yao, Wenying, 2022. "Credit offering strategy and dynamic pricing in the presence of consumer strategic behavior," European Journal of Operational Research, Elsevier, vol. 303(2), pages 753-766.
    5. Assarzadegan, Parisa & Hejazi, Seyed Reza & Raissi, Gholam Ali, 2020. "An evolutionary game theoretic model for analyzing retailers’ behavior when introducing economy and premium private labels," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    6. Cao, Yifan & Shen, Bin, 2022. "Adopting blockchain technology to block less sustainable products’ entry in global trade," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    7. Wang, Zizhuo & Wang, Mingzheng & Liu, Weiwei, 2020. "To introduce competition or not to introduce competition: An analysis of corporate social responsibility investment collaboration in a two-echelon supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    8. Li, Lingyue & Gao, Suixiang & Yang, Wenguo & Xiong, Xing, 2021. "Assessment and improvement of EPA's penalty policy: From the perspective of governments' and ships' behaviors," Transport Policy, Elsevier, vol. 104(C), pages 18-28.
    9. Hosseini-Motlagh, Seyyed-Mahdi & Choi, Tsan-Ming & Johari, Maryam & Nouri-Harzvili, Mina, 2022. "A profit surplus distribution mechanism for supply chain coordination: An evolutionary game-theoretic analysis," European Journal of Operational Research, Elsevier, vol. 301(2), pages 561-575.
    10. Xie, Lei & Hou, Pengwen & Han, Hongshuai, 2021. "Implications of government subsidy on the vaccine product R&D when the buyer is risk averse," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    11. Kumar, Patanjal & Baraiya, Rajendra & Das, Debashree & Jakhar, Suresh Kumar & Xu, Lei & Mangla, Sachin Kumar, 2021. "Social responsibility and cost-learning in dyadic supply chain coordination," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    12. Liurui Deng & Wentang Xu & Juan Luo, 2021. "Optimal Loan Pricing for Agricultural Supply Chains from a Green Credit Perspective," Sustainability, MDPI, vol. 13(22), pages 1-21, November.
    13. Li, Juntao & Liu, Pengfei, 2022. "Modeling green supply chain games with governmental interventions and risk preferences under fuzzy uncertainties," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 192(C), pages 182-200.
    14. Long, Qingqi & Tao, Xiaoying & Chen, Yunting & Chen, Yingni & Xu, Le & Zhang, Shuzhu & Zhang, Jie, 2022. "Exploring combined effects of dominance structure, green sensitivity, and green preference on manufacturing closed-loop supply chains," International Journal of Production Economics, Elsevier, vol. 251(C).
    15. De, Arijit & Ray, Ankita & Kundu, Tanmoy & Sheu, Jiuh-Biing, 2023. "Is it wise to compete or to collaborate? Remanufacturing business models under collective extended producer responsibility legislation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    16. Khosroshahi, Hossein & Dimitrov, Stanko & Hejazi, Seyed Reza, 2021. "Pricing, greening, and transparency decisions considering the impact of government subsidies and CSR behavior in supply chain decisions," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    17. Johari, Maryam & Hosseini-Motlagh, Seyyed-Mahdi, 2022. "Evolutionary behaviors regarding pricing and payment-convenience strategies with uncertain risk," European Journal of Operational Research, Elsevier, vol. 297(2), pages 600-614.
    18. Nie, Qingyun & Zhang, Lihui & Tong, Zihao & Hubacek, Klaus, 2022. "Strategies for applying carbon trading to the new energy vehicle market in China: An improved evolutionary game analysis for the bus industry," Energy, Elsevier, vol. 259(C).
    19. Jamali, Mohammad-Bagher & Rasti-Barzoki, Morteza & Khosroshahi, Hossein & Altmann, Jörn, 2022. "An evolutionary game-theoretic approach to study the technological transformation of the industrial sector toward renewable electricity procurement: A case study of Iran," Applied Energy, Elsevier, vol. 318(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kumar, Patanjal & Baraiya, Rajendra & Das, Debashree & Jakhar, Suresh Kumar & Xu, Lei & Mangla, Sachin Kumar, 2021. "Social responsibility and cost-learning in dyadic supply chain coordination," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    2. Hosseini-Motlagh, Seyyed-Mahdi & Govindan, Kannan & Nematollahi, Mohammadreza & Jokar, Abbas, 2019. "An adjustable bi-level wholesale price contract for coordinating a supply chain under scenario-based stochastic demand," International Journal of Production Economics, Elsevier, vol. 214(C), pages 175-195.
    3. Xia Zhao & Ning Li & Liang Song, 2019. "Coordination of a Socially Responsible Two-Stage Supply Chain Under Random Demand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 36(05), pages 1-27, October.
    4. Nematollahi, Mohammadreza & Hosseini-Motlagh, Seyyed-Mahdi & Heydari, Jafar, 2017. "Coordination of social responsibility and order quantity in a two-echelon supply chain: A collaborative decision-making perspective," International Journal of Production Economics, Elsevier, vol. 184(C), pages 107-121.
    5. Xia Zhao & Runsheng Yin, 2018. "Coordination of a socially responsible two-stage supply chain under price-dependent random demand," 4OR, Springer, vol. 16(4), pages 379-400, December.
    6. Chai Caichun & Zhu Hailong & Feng Zhangwei, 2018. "Evolutionary Stable Strategies for Supply Chains: Selfishness, Fairness, and Altruism," Journal of Systems Science and Information, De Gruyter, vol. 6(6), pages 532-551, December.
    7. Nematollahi, Mohammadreza & Tajbakhsh, Alireza & Mosadegh Sedghy, Bahareh, 2021. "The reflection of competition and coordination on organic agribusiness supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    8. Raj, Alok & Modak, Nikunja Mohan & Kelle, Peter & Singh, Bharati, 2021. "Analysis of a dyadic sustainable supply chain under asymmetric information," European Journal of Operational Research, Elsevier, vol. 289(2), pages 582-594.
    9. Yong Liu & Bing-ting Quan & Jiao Li & Jeffrey Yi-Lin Forrest, 2018. "A Supply Chain Coordination Mechanism with Cost Sharing of Corporate Social Responsibility," Sustainability, MDPI, vol. 10(4), pages 1-25, April.
    10. Matsui, Kenji, 2019. "A supply chain member should set its margin later if another member's cost is highly uncertain," European Journal of Operational Research, Elsevier, vol. 275(1), pages 127-138.
    11. Phan, Dinh Anh & Vo, Thi Le Hoa & Lai, Anh Ngoc & Nguyen, Thi Lan Anh, 2019. "Coordinating contracts for VMI systems under manufacturer-CSR and retailer-marketing efforts," International Journal of Production Economics, Elsevier, vol. 211(C), pages 98-118.
    12. Qian Wang & Yongguang Zhong & Guangye Xu, 2019. "Optimal Decisions and Coordination in a Socially Responsible Supply Chain with Irresponsibility Risk," Sustainability, MDPI, vol. 11(24), pages 1-16, December.
    13. Panda, S. & Modak, N.M. & Basu, M. & Goyal, S.K., 2015. "Channel coordination and profit distribution in a social responsible three-layer supply chain," International Journal of Production Economics, Elsevier, vol. 168(C), pages 224-233.
    14. Chowdhury, Rajib & Doukas, John A. & Park, Jong Chool, 2021. "Stakeholder orientation and the value of cash holdings: Evidence from a natural experiment," Journal of Corporate Finance, Elsevier, vol. 69(C).
    15. Chowdhury, Hasibul & Hodgson, Allan & Hasan, Mostafa Monzur, 2022. "Does a competitive external labour market affect corporate social responsibility? Evidence from industry tournament incentives," Journal of Behavioral and Experimental Finance, Elsevier, vol. 33(C).
    16. Liping Song & Yingluo Yan & Fengmin Yao, 2020. "Closed-Loop Supply Chain Models Considering Government Subsidy and Corporate Social Responsibility Investment," Sustainability, MDPI, vol. 12(5), pages 1-27, March.
    17. Bian, Junsong & Li, Kevin W. & Guo, Xiaolei, 2016. "A strategic analysis of incorporating CSR into managerial incentive design," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 86(C), pages 83-93.
    18. Biswas, Indranil & Raj, Alok & Srivastava, Samir K., 2018. "Supply chain channel coordination with triple bottom line approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 213-226.
    19. Veronica S Ülgen & Maria Björklund & Niklas Simm & Helena Forslund, 2019. "Inter-Organizational Supply Chain Interaction for Sustainability: A Systematic Literature Review," Sustainability, MDPI, vol. 11(19), pages 1-25, October.
    20. Yong Liu & Qian Xu & Zhi‐yang Liu, 2020. "A coordination mechanism through value‐added profit distribution in a supply chain considering corporate social responsibility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 586-598, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:128:y:2019:i:c:p:506-525. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.