Game analysis on two-tier remanufacturing green closed-loop supply chain considering incentive compatibility under uncertain demand

Abstract

The remanufacturing green closed-loop supply chain plays a crucial role under current global environmental pressures, especially in the high-tech manufacturing industry. This study addresses a two-level remanufacturing green closed-loop supply chain system composed of remanufacturers and retailers. Considering incentive compatibility theory under uncertain demand, we establish supply chain optimization models under different decision-making scenarios and analyze supply chain optimization issues through game theory in centralized, decentralized, contract decentralized, and differential subsidy modes. The study finds that: (1) Companies can guide the establishment of green supply chains through secondary subsidies; (2) TE and AE models each have advantages under different carbon emission sensitivity conditions; (3) The AE model is overall superior to other models; (4) Government intervention can effectively enhance profits and reduce carbon emissions. This paper is the first to apply incentive compatibility theory to an uncertain two-level remanufacturing green supply chain, helping enterprises build green supply chains, and proposes a dual regulatory strategy of carbon taxes and subsidies. This provides theoretical support and practical guidance for the formulation of differentiated incentive policies by governments and the green transformation of enterprises, aiding high-tech manufacturing companies in constructing remanufacturing green supply chains and enhancing their market competitiveness.

KEYWORDS:

• Uncertain demand
• incentive compatibility theory
• government subsidies
• environmental sustainability
• carbon emissions

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The authors can confirm that the data for tables are provided with the paper and no data was used.

Additional information

Funding

This work was supported by National Natural Science Foundation of China: [Grant Number 71840003]; Shanghai Planning Office of Philosophy and Social Science under Grants: [Grant Number 2022BGL010]; Scientific and Innovative Action Plan of Shanghai under Grants: [Grant Number 20692104300].