Abstract
This study investigates the joint trade‐in rebate strategies in a supply chain with independent manufacturers selling substitutable products via a dominant retailer. We model their interplay as a Stackelberg game and analyze their joint trade‐in rebate decisions. We find that the differentiated trade‐in rebate scheme is better for the retailer, and the manufacturers cooperating in making their trade‐in rebate decisions can achieve win‐win results in most cases. However, replacement consumers could benefit from the retailer's uniform trade‐in rebate scheme and the manufacturers not cooperating in their trade‐in decisions. The latter is always more beneficial to the environment.
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