Abstract:

EPR legislation， market competition and government’s recycling reward/punishment policy must have significant and sophisticated impacts on competing supply chain’s channel structure choice game behavior. Investigating the significant parameters that impact the competing supply chain’s vertical channel structure choice equilibrium can improve supply chain system’s efficiency and avoid chain members to be involved into the situation of prisoner’s dilemma. In addition， multi-externalities including imperfect competition， （dis-）economies of scale effect and so on have interactive impacts on inefficiency of chain-to-chain competition market under different EPR implementation strategies. Proposing government’s subsidy/tax policy can weaken such inefficiency and improve social welfare. As a result， the generalized study on competing supply chain’s channel structure strategy， government’s recycling reward/punishment policy and EPR implementation strategy is very important， which is not yet yielded by academic research.Considering the problems including competing supply chains’ channel structure selection and government's recycling reward/punishment policy design under different EPR implementation strategies including collective producer responsibility （CPR） and individual producer responsibility （IPR）， a chain-to-chain competition model consisting of two manufacturers and two retailers is constructed by game theory. By comparing the equilibrium results under different channel structure combinations， two competing supply chains channel choice game equilibrium， equilibrium characteristic and the design of government's recycling reward/penalty mechanism are investigated.The results show that both chains proposing coordinated structure arises as a unique and dominant strategy equilibrium with either CPR or in IPR system. Under CPR system， two supply chains are involved into prisoner’s dilemma that declines both chains’ profits， when the recycling cost features with high degree of dis-economies of scale， or when the recycling cost doesn’t feature with high degree of dis-economies of scale as well as the market competition is intense. Under IPR system， two supply chains are involved into prisoner’s dilemma which declines both chains’ profits when the market competition is intense enough.Considering the coordinated/decentralized chain-to-chain competition market， the trend of government’ reward/punishment policy design is “tax-subsidy-reward” under CPR system and is “subsidy-reward” under IPR system， when the degree of economies of scale rises. The results will expand the existed closed supply chain channel management theory and government’s recycling policy design theory from the perspective of closed-loop supply chain competition and mechanism design.

Key words: competing supply chain, extended producer responsibility, reward-penalty mechanism, （dis-） economies of scale