Dynamic coopetition game between private label and national brand under carbon trading policy

Abstract

The increasing environmental concerns have changed the coopetition behavior between private-label (PL) retailers and national-brand (NB) manufacturers, which needs firms to reconsider their competitive and cooperative strategies to cope with this change. To address this need, we incorporate carbon trading policy into dynamic coopetition game models between a PL retailer and an NB manufacturer. We examine their dynamic evolution trajectories of state variables, decision variables, and profit value functions by using numerical simulation. The sensitivity analysis shows that: (i) some key parameters affect the steady-state values of variables and profit value functions; (ii) the relative strengths of the NB manufacturer and the PL retailer affect decision variables and profit value functions. The results indicate that the carbon trading policy significantly affects dynamic coopetition between the PL retailer and the NB manufacturer.