Promoting consumer returns in closed-loop supply chains under cap-and-trade regulation: A cooperative recycling advertising perspective

Abstract

Under carbon cap-and-trade regulation, to control carbon emissions and improve the recycling efficiency of waste electrical and electronic equipment (WEEE) from the traditional offline recycling channel, more enterprises attempt to simultaneously combine the online recycling platform with the digital transformation of the supply chain. Based on a closed-loop supply chain (CLSC) with dual recycling channels and considering recycling advertising invested both in offline and online recycling channels, this paper attempts to explore the optimal recycling advertising mode which can both achieve economic and environmental performance under cap-and-trade regulation. Therefore, game models including a manufacturer and above either recycler are established, which are respectively correspond to four recycling advertising modes: manufacturer cooperates with neither recycler (MO mode), manufacturer only cooperates with the offline retailer (MR mode), manufacturer only cooperates with the online recycling platform (MT mode), and manufacturer cooperates with either recycler (MRT mode). Consequently, this paper solves the optimal decisions of the tripartite and focuses on the analysis of the impact of cooperative (competitive) recycling advertising under cap-and-trade regulation. By comparing the profits and total carbon emissions of the whole CLSC under four recycling advertising modes, the results indicate that: cooperative advertising between the manufacturer and two recyclers can achieve economic and environmental performance for the whole CLSC if the free-riding phenomenon occurs in recycling advertising. Otherwise, influenced by competitive recycling advertising, the above mode turns to the suboptimal one for the profits of two recyclers and the total carbon emissions of the CLSC. Moreover, driven by economic benefits, cooperative advertising will eventually become a consensus, but the total carbon emissions may not always be the least.