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      Game-Theoretic Analysis to Examine How Government Subsidy Policies Affect a Closed-Loop Supply Chain Decision

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      Applied Sciences
      MDPI AG

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          Abstract

          The pros and cons of government subsidy policies in a closed-loop supply chain (CLSC) setting on optimal pricing, investment decisions in improving product quality, and used product collection under social welfare (SW) optimization goal have not been examined comprehensively. This study compares the outcomes of three government policies under manufacturer-Stackelberg (MS) and retailer-Stackelberg (RS), namely (i) direct subsidy to the consumer, (ii) subsidy to the manufacturer to stimulate used product collection, and (iii) subsidy to the manufacturer to improve product quality. Results demonstrate that the greening level, used product collection, and SW are always higher under the RS game, but the rate of a subsidy granted by the government is always higher under the MS game. Profits for the CLSC members and SW are always higher if the government provides a subsidy directly to the consumer, but productivity of investment in the perspective of the manufacturer or government are less. In a second policy, the government organizations grant a subsidy to the manufacturer to stimulate used product collection, but it does not necessarily yield the desired outcome compared to others. In a third policy, the manufacturer receives a subsidy on a research and development (R&D) investment, but it yields a sub-optimal greening level. This study reveals that the outcomes of subsidy policies can bring benefit to consumers and add a degree of complication for CLSC members; government organizations need to inspect carefully among attributes, mainly product type, power of CLSC members, and investment efficiency for the manufacturer, before implementing any subsidy policies so that it can lead to an environmentally and economically viable outcome.

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          Closed-Loop Supply Chain Models with Product Remanufacturing

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            Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future

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              Monopoly and product quality

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                Author and article information

                Contributors
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                Journal
                ASPCC7
                Applied Sciences
                Applied Sciences
                MDPI AG
                2076-3417
                January 2020
                December 23 2019
                : 10
                : 1
                : 145
                Article
                10.3390/app10010145
                0ec62841-c14a-429b-8b62-d156a8a9cb6a
                © 2019

                https://creativecommons.org/licenses/by/4.0/

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