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To Cooperate or Not? An Analysis of Complementary Product Pricing in Green Supply Chain

Author

Listed:
  • Jie Wei

    (School of Economics and Management, Hebei University of Technology, Tianjin 300401, China)

  • Wen Wang

    (Business School, Nankai University, Tianjin 300071, China)

  • Sang-Bing Tsai

    (Zhongshan Institute, University of Electronic Science and Technology, Zhongshan 528400, China
    Research Center for Environment and Sustainable Development of China Civil Aviation, Civil Aviation University of China, Tianjin 300300, China)

  • Xiaoli Yang

    (Tianjin Social Sciences, Tianjin Academy of Social Science, Tianjin 300191, China)

Abstract

This paper investigates the green supply chain pricing problem when two manufacturers sell complementary products to one retailer. Considering the manufacturers’ cooperation or noncooperation strategies, we first give the centralized pricing model as a benchmark. According to market power among the supply chain, we analyze two types of supply chains: supplier-led type where the green driving factor comes from the suppliers and retailer-led type where the core member retailer leads the green supply chain. We then give two decentralized pricing models through considering strategic cooperation between two manufacturers and different structures. Corresponding closed-form expressions for equilibrium pricing strategies are established. Finally, many valuable managerial results are acquired through comparing the profits and equilibrium decisions of these models. Our paper shows that consumers are indifferent as to who is the leader of the two echelons when the manufacturers adopt non-cooperative action; the two complementary products get the same optimal wholesale/retail prices, maximum retail margins, and maximum demands regardless of the manufacturers’ cooperation or noncooperation strategies.

Suggested Citation

  • Jie Wei & Wen Wang & Sang-Bing Tsai & Xiaoli Yang, 2018. "To Cooperate or Not? An Analysis of Complementary Product Pricing in Green Supply Chain," Sustainability, MDPI, vol. 10(5), pages 1-21, May.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:5:p:1392-:d:144099
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    1. Shaobo Wu & Shiping Wen & Quan Zhou & Xinghong Qin, 2020. "Coordination of Store Brand Product’s Green Supply Chain Based on Negotiation," Sustainability, MDPI, vol. 12(9), pages 1-25, May.
    2. Gan Wan & Gang Kou & Tie Li & Feng Xiao & Yang Chen, 2020. "Pricing Policies in a Retailer Stackelberg O2O Green Supply Chain," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    3. Weimin Ma & Zhengrong Cheng & Shiwei Xu, 2018. "A Game Theoretic Approach for Improving Environmental and Economic Performance in a Dual-Channel Green Supply Chain," Sustainability, MDPI, vol. 10(6), pages 1-18, June.
    4. Haiyan Shan & Chen Zhang & Guo Wei, 2020. "Bundling or Unbundling? Pricing Strategy for Complementary Products in a Green Supply Chain," Sustainability, MDPI, vol. 12(4), pages 1-25, February.

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