Fairness Concern in Remanufacturing Supply Chain—A Comparative Analysis of Channel Members’ Fairness Preferences

Abstract

Remanufacturing is a sustainable product reutilization strategy to realize responsible consumption and production. However, it has remained a largely untapped opportunity for enhancing productivity due to some behavioral matters such as fairness concerns of remanufacturing related firms. Concerning the emerging and development of remanufacturing industry, this paper provides a game-theoretic analysis for a remanufacturing supply chain (RSC) consisting of one leading manufacturer and a following retailer, with the inclusion of fairness concern. We propose and compare several scenarios of channel members’ fairness preferences as, both members are fairness concerned, only one member is fairness concerned, and both members are fair neutral, to expound how fairness concern affects RSC strategies and resulting utilities. We also demonstrate dynamic evolution and stable state of channel members’ selections of whether being fairness concerned in the long term. Analytical results show that favorable scenarios for the RSC to achieve desired objective are relevant to its preference for improved supply chain performance or enhanced environmental benefit. Whatever the preference is, however, it is detrimental for both members to be fairness concerned in the short term. In the long term, evolutionary stable strategies of fairness concerns indicate that both members or only one member would choose to be fairness concerned. The eventual status relies on the initial state of fairness preference. The results are especially relevant as a reference for remanufacturing related strategies, thus enhancing production sustainability as well as environmental benefits.