Optimizing Circular Economy Strategies for OEMs: Impact of Patent Licensing and Customer Behaviours under Various Commission Contracts with Platforms Lotka-Volterra Model with Fear Effect and Linear Harvesting

DOI

10.2991/978-2-38476-410-5_12How to use a DOI?

Keywords

circular economy strategies; original equipment manufacturers; lotkavolterra model

Abstract

Within the context of e-commerce platforms, which serve as the digital marketplace for manufacturers’ new and refurbished products, a dual role in the refurbishing process has emerged. Manufacturers can utilize patent licensing to either profit from new market entrants or retain control over internal refurbishing operations. To gain a deeper understanding of this evolving landscape of business competition and collaboration, our study has developed a two-phase game-theoretic model. This analysis is centered on a market comprised of a single OEM, a platform, and a diverse consumer base with varying product valuations, divided into high-end and low-end segments. In this framework, the platform offers two distinct commission structures: a proportional fee contract and a per-unit fee contract. Simultaneously, the OEM can opt for either in-house refurbishing or authorized refurbishing. This combination results in four unique business scenarios. Importantly, our findings extend beyond previous research by revealing that the choice of refurbishing mode is not solely dictated by refurbishing costs but is also significantly influenced by market parameters, especially the commission fee. Furthermore, our study highlights the divergence in the behavior of OEMs’ royalty fees and refurbishing strategies when faced with changes in commission rates under a proportional fee contract, primarily due to the platform’s propensity for free-riding behavior. Ultimately, our comparative analysis of profits between the OEM and the platform under various commission contracts provides valuable insights, indicating that the proportional fee contract consistently favors the OEM, while the platform’s choice of commission contract depends on refurbishing costs.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Yuliana Yuliana
AU  - Nughthoh Arfawi Kurdhi
PY  - 2025
DA  - 2025/07/28
TI  - Optimizing Circular Economy Strategies for OEMs: Impact of Patent Licensing and Customer Behaviours under Various Commission Contracts with Platforms Lotka-Volterra Model with Fear Effect and Linear Harvesting
BT  - Proceedings of the 2nd International Conference on Sciences, Mathematics, and Education 2023 (ICOSMED 2023)
PB  - Atlantis Press
SP  - 124
EP  - 135
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-410-5_12
DO  - 10.2991/978-2-38476-410-5_12
ID  - Yuliana2025
ER  -