Competing Reverse Channels’ Performance with Sustainable Recycle Innovation Input

Increasing attention to sustainable development issues and recycling are forcing the recyclers to use different incentives to capture more market share. Recycling innovation input is one of the effective topics in reverse competitive chains. Because of the importance of this issue, firstly, a basic closed-loop supply chain (CLSC) system is discussed that includes an integrated manufacturer and a third-party collector. Then the impact of the integration with the innovation input into third-party product collectors is considered. Eventually, two models are constructed. The first model is a basic model that includes an integrated manufacturer and one third-party collector with innovation investment. The other model is the hybrid model that includes an integrated manufacturer and two third-party collectors with and without innovation input. Stackelberg game models are used to study the optimal pricing strategies for all three models and players’ attitudes toward different scenarios. Finally, numerical analysis is presented. Our findings are generated on the following three aspects. The collector’s recycling choice, recycling innovation input, and influence on recyclers and manufacturers. It is found that the manufacturer will always choose to recycle and prefers the hybrid recycling market, which depends on the rate of collection and the compensation from production-collecting. Moreover, the results reveal that the highest return rate of recyclers occurred under the hybrid model. However, the recyclers may not be able to invest the sustainable recycle innovation input under the exorbitant innovation barriers.