Evolutionary game analysis of cooperation between natural resource- and energy-intensive companies in reverse logistics operations

Wei Gu, Lirong Wei, Wenqing Zhang, Xiangbin Yan

Research output: Contribution to journalArticle

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Abstract

Reverse logistics (RL) plays a significant role in circular economic development, especially in natural resource- and energy-intensive industries (NREI) as a long-term strategy to make a breakthrough in their development. In this study, we construct an evolutionary game theoretical model to investigate the cooperation between NREI companies that adopt one of two reverse logistics operating strategies: self-operation or joint venture. We derive the evolutionary stable strategy of the game through a replicator dynamic system. Simulation experiments are also conducted to validate the theoretical results, to show the evolution, and to analyze the sensitivities to parameters, based on the data of the steel industry that we collected from China. Among many other outcomes, our results show that self-operation is more likely to succeed in operating the current reverse logistics system. The methodologies and results are useful in supporting NREI's reverse logistics decisions. The practical applications of the study can be extended to other NREI sectors when the way of RL implementation is to be decided.

Original languageEnglish (US)
Pages (from-to)159-169
Number of pages11
JournalInternational Journal of Production Economics
Volume218
DOIs
StatePublished - Dec 2019
Externally publishedYes

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Keywords

  • Cooperation analysis
  • Evolutionary game theory
  • Evolutionary stable strategy
  • Reverse logistics operation

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