Competitive reselling channel choices of recyclers with online retailer encroachment

In this article, we develop a game model consisting of two competitive recyclers and an online retailer. The retailer has the opportunity to recycle second-hand products and resell them to consumers. The recyclers collect second-hand products from consumers and sell them to consumers through their online recycling platforms or the second-hand selling platform of the online retailer. The recyclers incur a fixed cost if they develop their own selling platform. Otherwise, if the recyclers sell products via the online retailer, the recyclers must give a proportion of the sales revenue to the online retailer as a commission. Without retailer encroachment, intuitively, the recyclers will choose to develop their own selling platform if the fixed cost is low. After the online retailer encroaches on the recycling market, recyclers are more willing to sell products through their online recycling platforms. Interestingly, both the online retailer and recyclers could benefit from retailer encroachment.