Complex Dynamics of Pricing Game Model in a Dual-Channel Closed-Loop Supply Chain with Delay Decision

Abstract

In this paper, we study a dual-channel closed-loop supply chain (CLSC) consisting of one manufacturer, one retailer and one third-party firm or platform (3P). The manufacturer wholesales new products through the traditional retail channel and distributes remanufactured products via 3P. We focus on establishing the dynamic Stackelberg game models for nondelayed and delayed cases, respectively. The existence and local stability of Nash equilibrium are examined as well as the complex dynamical behaviors of each model under various scenarios are investigated by numerical simulations, such as stability region, bifurcations, chaos, strange attractors, and so on. Moreover, the impacts of some key parameters on the performance of chain members are analyzed. In addition, the variable feedback control method is utilized to eliminate the system chaos. The results reveal that the high value of the consumer discount perception for remanufactured products and excessively fast price adjustment speed have a destabilization effect on the Nash equilibrium point. In addition, adopting delay decisions by manufacturer does not always make the system more stable because it can exert either positive or negative effect on the system’s stability, while an intermediate delay weight is conducive to the system have a higher chance to stay stable. Furthermore, the manufacturer’s profits will be declined significantly while the profits of retailer and 3P will be elevated to some extent when the system falls into periodic and chaotic motions, so chaos is not always necessarily detrimental to all the decision makers in the dual-channel CLSC.