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Open AccessArticle

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

by Jie Wei 1, Wen Wang 2, Sang-Bing Tsai 3,4,* and Xiaoli Yang 5,*
1
School of Economics and Management, Hebei University of Technology, Tianjin 300401, China
2
Business School, Nankai University, Tianjin 300071, China
3
Zhongshan Institute, University of Electronic Science and Technology, Zhongshan 528400, China
4
Research Center for Environment and Sustainable Development of China Civil Aviation, Civil Aviation University of China, Tianjin 300300, China
5
Tianjin Social Sciences, Tianjin Academy of Social Science, Tianjin 300191, China
*
Authors to whom correspondence should be addressed.
Sustainability 2018, 10(5), 1392; https://doi.org/10.3390/su10051392
Received: 6 March 2018 / Revised: 9 April 2018 / Accepted: 18 April 2018 / Published: 2 May 2018
(This article belongs to the Special Issue Sustainable Action in Consumption and Production)
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. View Full-Text
Keywords: green supply chain; complementary products; supply chain leadership; cooperation pricing; sustainable pricing; sustainability green supply chain; complementary products; supply chain leadership; cooperation pricing; sustainable pricing; sustainability
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MDPI and ACS Style

Wei, J.; Wang, W.; Tsai, S.-B.; Yang, X. To Cooperate or Not? An Analysis of Complementary Product Pricing in Green Supply Chain. Sustainability 2018, 10, 1392.

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