| Summary: | Effective and efficient closed-loop supply chain processes can provide a significant competitive edge for companies. This study considered three investment strategies in the process of initiating closed-loop supply chain alliances. The results showed that a promised proportion has a significant effect on investment decisions under a pure investment strategy. Furthermore, a reasonable promised proportion can coordinate the supply chain under a pure innovation strategy but cannot in a pure advertising strategy. Upstream (i.e., innovation) investments decrease wholesale and retail prices, while downstream ones increase retail and wholesale prices. Increasing innovation investment can transform benefits to the downstream, while increasing advertising investment may cause opportunism. A hybrid investment strategy balances upstream and downstream investment simultaneously and provides insights into optimizing the supply chain system in investments.
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