Research On Vertical Structure Selection Strategies Of Competitive Closed-loop Supply Chains With Unequal Power

With the process of economic globalization,supply chain competition has become the main form of competition in industries.Focusing on three collection modes,this paper explores the vertical structure selection of two competitive closed-loop supply chains under unequal power.Among them,in the two modes of manufacturer collection and retailer collection,each chain manufacturer only has two options: alliance with retailers(C structure)or non-alliance(D structure);in the third-party-collection mode,each chain manufacturer has four options: full integration(C structure),forward integration with retailer only(F structure),reverse integration with third-party collector only(B structure)and complete non-integration(D structure).Through modeling,analyzing and comparing the equilibrium solutions and chains’ profits of possible structure combinations under three collection modes,the equilibrium strategies of two chains’ vertical structure selection and Pareto efficiency analysis are given.Finally,in order to reveal the influences of two chains’ decision-making status,the two cases of equal and unequal power are compared.The conclusions show that:(1)When the power of two chains is unequal,there exists "first-mover disadvantage" and "second-mover advantage" in leader-follower chain games in each collection mode.(2)Given the unequal power of two chains,in the two modes of manufacturer collection and retailer collection,if the vertical structure of the follower chain is given,regardless of the competition intensity of the two chains,it is more beneficial for the leader chain to choose C structure;when the vertical structure of the leader chain is given,if the competition between the two chains is mild(intense),the C structure(D structure)is the best choice of the follower chain;In the third-party-collection mode,if the vertical structure of the follower chain is given,the C structure is the best for the leader chain regardless of the intensity of competition;when the vertical structure of the leader chain is given,with the intensification of competition,C structure,F structure,B structure and D structure become the best choice of the follower chain in turn.(3)When the power of two chains is unequal,in the two modes of manufacturer collection and retailer collection,CC or CD may become the vertical structure selection equilibrium.CC may fall into prisoner’s dilemma,while CD is always Pareto efficient;in the third-party-collection mode,with the intensification of two chains competition,the four combinations of CC,CF,CB and CD become the vertical structure selection equilibrium of two chains in turn,and CC or CF may fall into prisoner’s dilemma.(4)By comparing the two power structures,it is found that under the two modes of manufacturer collection and retailer collection,there is only symmetric equilibrium in the vertical structure selection game in case of equal power between two chains,while there may be both symmetric and asymmetric equilibrium when the power is unequal;in the third-party-collection mode,CC may still be equilibrium,but non-centralized equilibrium combination of the two power structures has asymmetric characteristics;in all three collection modes,when the parameters are given,there may be double equilibrium combinations in case of equal power,while there is only unique equilibrium combination of unequal power.From the perspective of Pareto efficiency of equilibrium combination,no matter what the collection mode and power structure are,when two chains’ competition is flat,CC is Pareto efficient,but when the competition intensity increases to the corresponding threshold,CC will fall into prisoner’s dilemma.With the increase of competition intensity,double equilibrium combination or single non-centralized equilibrium combination will be formed when the two chains’ power is equal,and the Pareto efficiency of non-centralized equilibrium combination is better than CC.When the two chains’ power is unequal,TCF may fall into prisoner’s dilemma,while TCB and TCD are Pareto efficient.Therefore,when the competition is particularly fierce,regardless of the power structure,the equilibrium combinations with highly decentralization are easier to maintain Pareto efficiency.