Smart contract-driven closed-loop supply chain coordination for the circular economy: A blockchain and dynamic game-theoretic modelling approach

Abstract

With the deepening of the dual carbon target, the circular economy has become the core direction of manufacturing transformation and upgrading. As its core carrier, closed-loop supply chain still faces core pain points such as conflicts of interest among multiple parties, information asymmetry, high trust barriers, poor reverse recycling cycle, and low contract execution efficiency. This study is based on the tamper-proof and traceable technical characteristics of blockchain, and constructs a closed-loop supply chain lifecycle structure system driven by smart contracts. It characterizes the strategic interaction relationship between manufacturers, retailers, recyclers, and remanufacturing centers, establishes a Stackelberg dynamic game model, and derives the subgame perfect Nash equilibrium. An improved deep deterministic policy gradient algorithm is introduced to achieve multi-objective coordinated optimization in dynamic environments. The research results show that the model achieves a supply chain channel efficiency of 97.2%, a 22.6% increase in total revenue compared to traditional contract models, a contract default rate of 0.8%, a maximum recycling and remanufacturing rate of 92.5%, and a 41.7% decrease in cumulative carbon emissions throughout the entire lifecycle. Its comprehensive performance is significantly better than the four comparative models. Under extreme conditions such as high demand fluctuations, large-scale nodes, and heterogeneous recycling scenarios, the model still maintains strong robustness and scalability, providing theoretical support and a feasible technical path for the digital, trustworthy, and intelligent coordination of closed-loop supply chains in a circular economy.