Impact of reward-penalty mechanism and investment cost sharing on corporate social responsibility in a closed-loop supply chain

Rapid technological advancements and robust economic growth have fueled an escalating demand for electronic products. As a major hub for producing and consuming electronic products, China is confronted with the swift accumulation of waste electrical and electronic equipment (WEEE). To address this challenge, this paper examines the impact of government reward and punishment mechanism (RPM) and investment cost sharing (ICS) in closed-loop supply chains (CLSC) on corporate social responsibility (CSR) and collection rate. Specifically, we construct four three-stage decision-making models for CLSC considering CSR. Through the equilibrium results, we observe that both RPM and ICS can effectively promote WEEE recycling. Besides, the level of corporate social responsibility, retailer profits and recycler profits have all improved with the increase of the government reward and punishment and the proportion of investment cost sharing. Interestingly, when the cost-sharing ratio is higher than a certain threshold, the manufacturer's profit does not decrease but rises as the intensity of rewards and punishments increases. Finally, we conduct a numerical study to validate the analytic model, confirming that the CLSC’s benefit and CSR level are greatly improved when both RPM and ICS are jointly implemented.