Pride or Guilt? Impacts of Consumers’ Socially Influenced Recycling Behaviors on Closed-Loop Supply Chains

Problem definition : Social influenced emotions of pride and guilt have been identified by the environmental psychology (EP) literature as crucial drivers impacting recycling behavior, but they have mostly been overlooked in operations management (OM) research. In contrast, EP studies often ignore firms’ operational decisions. We analyze the impacts of both social influence and firms’ operational decisions to provide a comprehensive understanding of consumers’ recycling behaviors, which is essential for realizing remanufacturing’s full potential. Methodology/results : We consider a closed-loop supply chain consisting of a manufacturer selling a single product to a consumer community. Consumers’ recycling behavior depends on both the recycling reward offered by the manufacturer, as well as intrinsic and socially influenced pride (guilt) from recycling (not recycling). We develop an evolutionary game to model consumers’ recycling behavior and characterize the resulting equilibrium recycling rate, which is then integrated into the manufacturer’s decision problem. We characterize the manufacturer’s optimal strategy and the equilibrium recycling rate in four distinct regions defined by both the product’s overall difficulty of remanufacturing and the underlying strengths of consumers’ socially influenced pride and guilt. We show that in settings where the product has a moderately high difficulty of remanufacturing and consumers have stronger socially influenced pride than guilt, the manufacturer optimally induces an interior recycling rate. In such scenarios, there exist win-win pathways in using social influence–based interventions to increase both the manufacturer’s profit and the recycling rate. However, misalignment may occur when consumers substantially care for the product’s recyclability. Managerial implications : This study bridges sustainable OM and EP literature by analyzing how consumers’ socially influenced emotions of pride and guilt affect a manufacturer’s optimal decisions, profits, and the resulting recycling rate. We provide important insights for designing effective and efficient social influence–based interventions to improve recycling rates.