Diffusing sustainable supply chains: a hybrid evolutionary game theory and system dynamics approach

Abstract This study develops a comprehensive policy-making model to diffuse sustainable supply chain management (SSCM) across pharmaceutical supply chains (PSCs), addressing triple bottom line (TBL) concerns—people, planet, and profit—while considering stakeholder dynamics interactions and unexpected events like global pandemics. Initially, the pharma industry's most essential TBL criteria are extracted by systematically reviewing the extant literature. Next, two different types of evolutionary game theory (EGT) (i.e., pairwise contest game (PCG) and tripartite evolutionary game (TEG)) are innovatively integrated to describe the stakeholders' interactions, providing a theoretical basis for assessing strategy stability and sustainable practice diffusion across multi-tiered and multi-echelon PSCs under regulators' interventions. Then, a system dynamics (SD) model is developed based on the EGT models to simulate the targeted policy-making system based on Iran's PSC as a case study. Key findings reveal that COVID-19 health protocols and lockdowns increased work avoidance among Regulatory Enterprises (REs), but long-term adherence to sustainable policies by distributors (Ds) and retailers (Rs) is projected by 2228. Five policies—imposing fines, segregation and public disclosure, increased punishments and incentives, rewards for sustainable practices, and subsidies for sustainable purchases—are recommended to accelerate sustainable adoption by 2056, eliminate RE work avoidance, and achieve significant outcomes: a monthly reduction of over 2,000 expired products, a decrease of around 1,000 TCO2e (Tons of Carbon Dioxide Equivalent) in upstream CO 2 emissions, an increase of over 600 TCO2e in CO 2 neutralisation, and over 100 new monthly job vacancies. This highlights the model's potential to diffuse economic, environmental, and social sustainability in PSCs post-COVID-19 under regulations.