Game Decision and Coordination between OEM and Remanufacturer in the Authorization Mode: Green Innovation Perspective

Abstract

Abstract:

Remanufacturing of patented products is a hot issue in the current intellectual property law due to the difficulty in reaching the balance point between the protection of patent rights and the interests of the public. It is essential for remanufacturers avoid potential infringement and conflict of interests. This paper constructs the Stackelberg game model between the OEM and the remanufacturer under the patented authorization model to explore the impact of OEM's green innovation on the decision making in a supply chain. In view of the problem of efficiency loss under decentralized decision-making, the coordination mechanism of fixed fee T is designed to discuss the benefit coordination between OEM and remanufacturer. The results indicate that the development of remanufacturing business needs to meet certain conditions regardless of whether it is under a centralized decision or a decentralized decision scenario, and the OEM's green innovation helps reduce the starting threshold for remanufacturing. When the remanufacturing start-up threshold is satisfied, the OEM's green innovation will enable the remanufacturers to gain more profits. However, for the manufacturer, the relationship between its own profits and green innovation is so complex that the coordination mechanism cannot always work. When the consumer acceptance for remanufactured products is low, it is difficult to coordinate the benefits between the OEM and the remanufacturer, which restricts the development of remanufacturing business. When the consumer acceptance for remanufactured products is high, OEM and remanufacturer would sign a contract with fixed fee to ensure the benefits of both parties. On the whole, in the scenario of high acceptance, with the increase of OEM's green innovation degree, the economic value of coordination contracts is more significant.

Key words: remanufacturing, green innovation, Stackelberg game, coordination mechanism, closed-loop supply chain

Zhao Xiaomin, Meng Xiaoxiao, Zhu He. Game Decision and Coordination between OEM and Remanufacturer in the Authorization Mode: Green Innovation Perspective[J]. , 2020, 32(4): 132-145.

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