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A game theoretic approach for pricing decisions considering CSR and a new consumer satisfaction index using transparency-dependent demand in sustainable supply chains

Khosroshahi, Hossein, Rasti-Barzoki, Morteza, Hejazi, Seyed Reza
Journal of cleaner production 2019 v.208 pp. 1065-1080
consumer satisfaction, corporate social responsibility, demand functions, prices, profits and margins, supply chain
This paper considers the impact of transparency on the demand function and investigates the effect of transparency and corporate social responsibility on the decisions of the members of a supply chain and their profits for a green product. The main contribution of the present study is considering the impact of the transparency of a manufacturer on the profits of the supply chain members and customer satisfaction. In addition, a new consumer satisfaction index is proposed as a corporate social responsibility indicator. Moreover, three different strategies of manufacturer is considered: centralized, decentralized without corporate social responsibility concerns and decentralized with corporate social responsibility concerns. Furthermore, a game theoretic approach is used to formulate the problem and the equilibrium decision variables is calculated. At last, based upon the equilibrium solutions, several analysis and insights are proposed. As a result, if the manufacturer concerns with corporate social responsibility, his profit, the wholesale price and the retail price decreases, whereas the whole system profit, the demand, the retailer's profit and the whole supply chain profit increases compared with when he does not concern with corporate social responsibility. In addition, in all strategies, more transparency of the manufacturer leads to the more demand and supply chain profit and the higher level of greening degree leads to the higher prices and more demand.