Cooperative Collection Mode Selection in the Closed-Loop Supply Chain: A Differential Game Approach

The retrieval of end-of-life products is a critical component of closed-loop supply chain (CLSC) remanufacturing, yet achieving efficient recycling remains challenging due to coordination barriers between supply chain members. To address this issue, this study investigates the collaboration problem in end-of-life product collection within a CLSC consisting of a manufacturer and a retailer. The retailer is responsible for collecting end-of-life products, while the manufacturer may provide support through two alternative cooperation modes: fund cooperative and labor cooperative. Using the differential game approach, we develop equilibrium strategies under three scenarios—non-cooperation, fund-assistance cooperation, and labor-assistance cooperation. The analytical results show that cooperative collection strategies not only increase the recycling rate but also yield Pareto improvements, benefiting both the manufacturer and the retailer. Among the two cooperation modes, the labor cooperative achieves higher collection rates and greater joint profits than the fund cooperative. When considering heterogeneous collection costs between the manufacturer and retailer, the fund-assistance mode becomes more favorable for the manufacturer only when its collection cost substantially exceeds that of the retailer. Furthermore, we explore the combined implementation of fund and labor cooperative programs, revealing their potential to further enhance collection efficiency and overall profitability. This study contributes to the CLSC literature by introducing a dynamic differential game framework to model cooperative collection behaviors and provides actionable managerial implications for promoting manufacturer participation in used-product retrieval and fostering coordinated development across CLSC enterprises.