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Green product design with competition and fairness concerns in the circular economy era

Author

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  • Qingying Li
  • Xiaotong Guan
  • Tianqin Shi
  • Wen Jiao
Abstract
In this paper, we consider green product design in a supply chain consisting of one manufacturer and two retailers, where retailer 1 aims at monetary profit maximisation, and retailer 2 has fairness concern. We consider two kinds of green products: a marginal-intensive green product (MIGP) and a development-intensive green product (DIGP). For the former, the green investment cost depends on the green level and the production quantity; while for the latter, the green investment cost depends on the green level solely. In each case, we investigate the impact of the retailer’s fairness concern by comparing the optimal solutions and supply chain performance with those in the basic models in which all the supply chain members aim at profit maximisation. We find that retailer 2 will set a higher retailing price and earn a smaller market share. Such inferiority increases as retailer 2’s inequity aversion increases or as the substitutability degree of the products offered by the two retailers increases. We also find that retailer 2’s fairness concern will always harm the manufacturer. If an equity outcome is achieved, the supply chain may achieve a better performance; however, if an inequity outcome is attained, the supply chain always performs worse.

Suggested Citation

  • Qingying Li & Xiaotong Guan & Tianqin Shi & Wen Jiao, 2020. "Green product design with competition and fairness concerns in the circular economy era," International Journal of Production Research, Taylor & Francis Journals, vol. 58(1), pages 165-179, January.
  • Handle: RePEc:taf:tprsxx:v:58:y:2020:i:1:p:165-179
    DOI: 10.1080/00207543.2019.1657249
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    Cited by:

    1. Chunhai Yu & Yingxiang Zhang & Ling Liu & Thomas W. Archibald, 2024. "Low-carbon supply chain strategy and contract coordination considering manufacturers′ fairness concerns," Operational Research, Springer, vol. 24(4), pages 1-51, December.
    2. Hafezi, Maryam & Zhao, Xuan & Zolfagharinia, Hossein, 2023. "Together we stand? Co-opetition for the development of green products," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1417-1438.
    3. Wang, Min & Huang, Hongfu & Liu, Feng, 2023. "To adapt or to standardize? Cross-market green product design under parallel importation impact," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 174(C).
    4. Cao, Yifan & Li, Qingying & Shen, Bin & Wang, Yulan, 2023. "Buyer collaboration in managing supplier responsibility with ESG due diligence effort spillover and fairness concerns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    5. Genhasi Ge & Daoping Wang & Mesumbe Bianca Epede, 2022. "Pricing Policies of Green Dual-Channel Supply Chain with Fairness Concerns and Altruistic Preferences Based on Consumers’ Environmental Awareness and Channel Preference," IJERPH, MDPI, vol. 19(20), pages 1-28, October.
    6. Li, Qingying & Ma, Manqiong & Shi, Tianqin & Zhu, Chen, 2022. "Green investment in a sustainable supply chain: The role of blockchain and fairness," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 167(C).
    7. Yu, Min & Cruz, Jose M. & Li, Dong & Masoumi, Amir H., 2022. "A multiperiod competitive supply chain framework with environmental policies and investments in sustainable operations," European Journal of Operational Research, Elsevier, vol. 300(1), pages 112-123.
    8. Arijit Bhattacharya & Shefali Srivastava & Abhijit Majumdar, 2024. "Circular supply chains in manufacturing—Quo vadis? Accomplishments, challenges and future opportunities," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4397-4423, July.
    9. Xu, Hao & Chen, Liuxin & Ma, Lijun, 2024. "Supply chain product innovation and marketing strategies under different fairness concerns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).
    10. Adhikari, Arnab & Bisi, Arnab, 2020. "Collaboration, bargaining, and fairness concern for a green apparel supply chain: An emerging economy perspective," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 135(C).
    11. Izabela Nielsen & Sani Majumder & Eryk Szwarc & Subrata Saha, 2020. "Impact of Strategic Cooperation under Competition on Green Product Manufacturing," Sustainability, MDPI, vol. 12(24), pages 1-28, December.
    12. Lei Song & Qi Xin & Huilin Chen & Lutao Liao & Zheyi Chen, 2023. "Optimal Decision-Making of Retailer-Led Dual-Channel Green Supply Chain with Fairness Concerns under Government Subsidies," Mathematics, MDPI, vol. 11(2), pages 1-16, January.
    13. Liang Shen & Fei Lin & Yuyan Wang & Xin Su & Hua Li & Rui Zhou, 2022. "Advertising Decisions of Platform Supply Chains Considering Network Externalities and Fairness Concerns," Mathematics, MDPI, vol. 10(13), pages 1-21, July.
    14. Shi, Xiutian & Chan, Hau-Ling & Dong, Ciwei, 2020. "Impacts of competition between buying firms on corporate social responsibility efforts: Does competition do more harm than good?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    15. Takuro Miyamoto, 2023. "Green product diffusion and innovation in supply chains," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 331-353, July.
    16. Xia, Lulu & Li, Kai & Fu, Hong, 2024. "Bargaining in mobile app supply chain considering members’ fairness concern attitudes," International Journal of Production Economics, Elsevier, vol. 270(C).
    17. Zhang, Ranran & Ma, Weimin & Si, Hongyun & Liu, Jinjin & Liao, Le, 2021. "Cooperative game analysis of coordination mechanisms under fairness concerns of a green retailer," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).

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