Pricing and collection rate decisions in a closed-loop supply chain considering consumers' environmental responsibility

With the increase of environmental protection awareness among consumers and related government legislation, collection rate of used products is becoming an important business decision. This paper develops game models to explore price and collection rate decisions in a closed-loop supply chain considering heterogenous consumers with environmental responsibility. This paper also investigates the retailer's pricing strategies: differentiated pricing and equal-pricing. The results indicate that when the proportion of green consumers or initial retail price is high, the collection rate under equal-pricing is higher than that under differentiated pricing, and equal-pricing strategy is a win-win strategy. Under differentiated pricing, the collection rate decreases rapidly, while the retail price of remanufactured product and the retailer's profit increase. The endogenization of the initial retail price of new products affects the pricing strategy, especially when the proportion of green consumers is low enough. Under the endogenous initial retail price and heterogenous consumers, equal-pricing is a win-win strategy if the mean of the acceptance degree of remanufactured products is low and its dispersion is high. To improve environmental performance, the acceptance degree and its central tendency should be raised. (C) 2020 Elsevier Ltd. All rights reserved.