The optimal reverse channel choice under supply chain competition

This note extends the model of Savaskan et al. (2004) to examine the impact of supply chain competition on the optimal reverse channel choice of manufacturers who remanufacture their own products. Even for two identical supply chains, asymmetric equilibria of strategic reverse channel choices may arise, in which one prefers retailer-managed collection and the other prefers manufacturer-managed collection. There exists a prisoner's dilemma in which the Pareto optimal solution is for both manufacturers to use manufacturer-managed collection, but retailer-managed collection is a dominant strategy.