Application of Game Theory in the Fast Fashion Industry Chain: A New Path to Optimize Collaboration and Sustainable Development

1. Introduction

As an important part of the modern retail industry, the fast fashion industry is known for its fast production, efficient distribution and flexible market response capabilities[1]. However, this business model centered on speed and cost-effectiveness has also brought serious environmental and social problems[2]. The multi-level and global operation of the fast fashion supply chain has made it face severe challenges in terms of resource consumption, pollution emissions and waste management. At the same time, the multiple stakeholders involved in the supply chain - from raw material suppliers, manufacturers to retailers and consumers - often have conflicts and non-cooperation due to inconsistent interests. This not only hinders the improvement of supply chain efficiency, but also increases the difficulty of achieving sustainable development.

Against the background of the global concept of sustainable development gradually taking root in people's hearts, the high environmental cost of the fast fashion industry has gradually attracted widespread attention from the society[3]. Enterprises need to find a balance between economic interests and environmental responsibilities, and the realization of this goal cannot be achieved without the support of scientific theoretical frameworks and practical tools. Therefore, exploring how to optimize supply chain collaboration, resolve conflicts of interest and promote environmental sustainability has become a key issue for the future development of the fast fashion industry. This paper aims to explore new paths to optimize collaboration and sustainable development by analyzing the complex problems in the fast fashion industry chain. By integrating multiple theories and practices, especially game theory, a systematic analytical tool, this paper attempts to provide innovative solutions for the fast fashion industry. The study not only focuses on how to alleviate conflicts of interest in the supply chain, but also explores the role of incentive mechanism design and strategic modeling in promoting circular economy practices. The theoretical significance of this study lies in applying game theory to the field of supply chain management, providing a new perspective for understanding and resolving conflicts of interest in the fast fashion industry. By integrating strategic modeling and incentive mechanisms, this study further improves the theoretical framework of sustainable supply chain collaboration.

2. Basic Concepts and Models of Game Theory

2.1. Application of Static Game and Dynamic Game in Industrial Chain Management

Static game and dynamic game are two basic concepts in game theory, which are used to analyze the strategic interaction of participants in different time dimensions[4]. Static game assumes that all participants make decisions at the same time point. This model is suitable for analyzing one-time or short-term decision-making problems[5]. For example, in the fast fashion supply chain, price negotiations between brands and suppliers can be regarded as static games. Suppliers need to balance production costs and profit needs, while brands pursue low-cost procurement to maintain market competitiveness. Through the static game model, it is possible to analyze how both parties choose the optimal strategy in price negotiations to achieve their goals[6].

In contrast, dynamic games are more suitable for describing strategic interaction processes involving time evolution. Dynamic games are usually used to study long-term cooperation issues in supply chain management[7], and the establishment and maintenance of trust between brands and long-term cooperative suppliers[8]. This type of game model provides guidance for formulating long-term strategies by analyzing the strategic choices of participants at different stages[9]. In the fast fashion industry, static game and dynamic game models have important applications in supply chain optimization. This study will combine these two game models to explore strategic paths to improve supply chain collaboration efficiency, alleviate conflicts of interest, and promote the sustainable development of the fast fashion industry.

2.2. Theoretical Framework of Repeated Games and Cooperative Games

Repeated games are a special form of dynamic games, emphasizing how participants gradually build trust and optimize cooperation models through strategy adjustments during multiple interactions[10][11]. In the fast fashion supply chain, the repeated game model can be used to study how the long-term cooperative relationship between brands and suppliers is strengthened through repeated interactions[12]. Through repeated transactions, brands can motivate suppliers to adopt more environmentally friendly production methods through stable orders. Continuous demand enables suppliers to optimize their operations to achieve sustainable development, and suppliers can also win the trust of brands through transparent production processes[13].

Cooperative games emphasize the realization of win-win results for multiple parties through the reasonable allocation of benefits and costs[14]. This theoretical framework is particularly suitable for analyzing the problem of multi-party collaboration in the fast fashion industry chain, and how to allocate resources and profits in different links of the supply chain. The cooperative game model provides strong support for the design of a green supply chain. By optimizing the benefit distribution mechanism, it can motivate all parties to jointly assume environmental responsibilities[15][16].

3. Game Phenomenon in the Fashion Industry Chain

3.1. Price Negotiation Game between Brands and Suppliers

In the fast fashion supply chain, price negotiations between brands and suppliers are a typical manifestation of the game phenomenon. The essence of this interdependence and game relationship is that the goals of brands and suppliers are not completely consistent, but they must cooperate to promote the efficient operation of the entire supply chain. Brands want to lower the purchase price[17], while suppliers try to increase the profit per unit of goods without reducing quality or delaying delivery[18]. The two parties are both interdependent and competitive in the negotiation[19][20]. In the fast fashion supply chain, the focus of brands is not on responsiveness, trust and commitment but on reducing costs[21][22]. Suppliers not only need to balance their relationship with brands, but also need to compete with other suppliers in production efficiency, cost control and quality assurance[23]. The use of static game models in this area shows that by looking at both sides' decision space, it is possible to find the best strategy they can use in the negotiation and how that strategy will affect the supply chain as a whole. The application of the static game model not only reveals the trade-offs between brands and suppliers in price negotiations, but also shows how to achieve a win-win situation through optimization strategies. In supply chain management, the guidance of this model can help companies find a balance point[24] to meet the cost control needs of brands while ensuring the profit margins of suppliers, thereby improving the stability and efficiency of the entire supply chain. This approach is particularly suitable for the fast-changing market demands of the fast fashion industry[25], laying the foundation for the establishment of long-term cooperative relationships.

3.2. Trust Game between Fast Fashion Enterprises and Consumers

The interaction between fast fashion enterprises and consumers is a typical game phenomenon[26], which is particularly evident in the context of information asymmetry. As consumers pay more attention to the environmental friendliness of products and the transparency of production, enterprises face new challenges in the production and marketing process[27][28], namely how to meet consumers' expectations for sustainable practices while maximizing profits[29]. This game relationship not only affects the short-term interests of enterprises, but also has a profound impact on the long-term brand value and industry status of enterprises in the market.

In this context, the repeated game model provides an important theoretical framework for analyzing the dynamic relationship between the fast fashion industry and consumers. Unlike static games, the repeated game model focuses on the evolution of the behavior of all parties in long-term interactions and its impact on the establishment of trust relationships[30]. Fast fashion enterprises can gradually accumulate consumer trust by continuously improving the environmental standards of their products and improving the transparency of the production process[31]. This trust is not achieved overnight, but is based on the fast fashion enterprises' repeated demonstration of positive responses to environmental responsibility and consumer needs. When fast fashion companies regularly publish sustainability reports, use more environmentally friendly raw materials, or improve supply chain transparency[32], consumers will gradually realize that the company's commitment is credible, which will enhance their trust in the brand[33]. At the same time, consumer purchasing behavior also has a direct impact on the company's strategic adjustments[34]. In the fast fashion industry, consumer consumption choices and behaviors are an important part of market signals. When consumers choose to buy more brands that excel in environmental protection and ethics, companies will be more inclined to adopt sustainable production models to respond to market demand. This interactive relationship forms a positive cycle: consumer behavior drives corporate improvements, and corporate improvements in turn enhance consumer willingness to buy[35]. This long-term two-way interaction enables companies to not only fulfill their environmental responsibilities, but also transform them into market competitiveness and economic benefits.

The repeated game model reveals the nature of the long-term interaction between companies and consumers in the fast fashion industry. This interaction can not only win consumer trust and enhance brand value through continuous improvement and transparent information, but also drive the industry to develop in a more sustainable direction. Through this two-way relationship, companies can not only enhance consumer loyalty and improve market competitiveness, but also find a balance between fulfilling social responsibilities and realizing economic benefits, and ultimately achieve the dual goals of economic benefits and social value. This model provides strong theoretical support for fast fashion companies in responding to sustainability challenges, and also provides practical guidance for the green transformation of the entire industry.

4. Discussion

Game theory provides an important theoretical basis for the complexity of multi-party interactions in the fast fashion industry chain. This paper combines static game, dynamic game, repeated game and cooperative game models to explore the application of this tool in optimizing collaboration and promoting sustainable development. Research shows that static game can effectively analyze short-term price negotiations between brands and suppliers[36][37]. The strategic space and equilibrium points of both parties are shown. This makes it possible to find a balance between short-term goals and improves the overall efficiency of the supply chain. Dynamic game shows the importance of building trust in long-term cooperative relationships, especially by analyzing the strategic choices of participants at different stages[38]. Dynamic game provides a long-term perspective and strategic guidance for solving cooperation problems in the fast fashion supply chain. In addition, repeated game shows great potential in building trust between enterprises and consumers. As consumers pay more and more attention to environmentally friendly products and transparent production processes[39][40], the repeated game model reveals the possibility of enterprises winning consumer trust by continuously improving product standards and transparency. This trust can not only enhance the market competitiveness of enterprises, but also promote the market to transform in a more environmentally friendly direction. Cooperative game provides theoretical support for multi-party collaboration in the fast fashion supply chain. Through the reasonable design of incentive mechanisms and allocation rules, cooperative games can achieve win-win results for all parties in terms of resource allocation and environmental responsibility, and provide a practical path for the practice of circular economy[41].

Although the application of game theory in the fast fashion industry chain has high theoretical value, it still faces challenges in practice. The complexity and dynamics of the fast fashion supply chain put forward higher requirements for the design of game models, such as rapid changes in market demand, information asymmetry in the supply chain, and conflicts of interest among multiple parties, which increase the difficulty of the model. At the same time, the issue of sharing environmental responsibility has not been fully resolved in practice. Although cooperative games provide a framework for allocating benefits and costs, it is still difficult to balance the interests and environmental responsibilities of different links in reality. In addition, the complexity of consumer behavior and changes in environmental policies also raise uncertainties about the effectiveness of game models. For example, consumers' willingness to pay and preferences may be affected by cultural background or economic conditions, while adjustments to policies and regulations may have unpredictable effects on the decisions of supply chain participants.

In order to meet these challenges, future research needs to further deepen and expand the game model in combination with the special needs of the fast fashion industry. On the one hand, environmental responsibility, economic benefits and market demand can be incorporated into a unified framework through a multi-dimensional dynamic game model to explore solutions for multi-objective optimization. On the other hand, combining game theory with tools such as big data analysis and artificial intelligence can enhance the predictive ability of the model and improve its applicability in a rapidly changing environment. At the same time, at the policy design level, game theory can provide theoretical support for the cooperation between the government and enterprises, such as guiding enterprises to invest in environmental responsibility by designing environmental incentive policies and green supply chain standards.

5. Conclusion

This paper analyzes the core theoretical model of game theory and its application in the fast fashion industry chain, revealing the important value of this tool in optimizing collaboration, resolving conflicts of interest and promoting sustainable development. The multi-level and dynamic nature of the fast fashion industry chain not only brings about efficient production and distribution models, but also accompanied by serious environmental problems and conflicts between stakeholders. Through the frameworks of static game, dynamic game, repeated game and cooperative game, this paper systematically explores how game theory can provide scientific decision-making support and optimization paths for this complex industry.

Research shows that static game can effectively deal with short-term decision-making problems in the supply chain, especially in price negotiations between brands and suppliers. Static game provide an analytical tool for balancing the interests of both parties. Dynamic game provides a theoretical basis for the establishment of long-term cooperative relationships and help supply chain participants find optimization strategies in maintaining trust. The repeated game model reveals the long-term process of trust building between enterprises and consumers, indicating that continuous transparency and environmental responsibility practices can effectively enhance the market competitiveness of enterprises. Cooperative games focuse on multi-party collaboration and incentive mechanism design, and promote the transformation of the supply chain towards a circular economy and greening through the reasonable allocation of benefits and costs.

Despite this, the practical application of game theory in the field of fast fashion still faces multiple challenges. The complexity and dynamics of the supply chain put forward higher requirements for the construction of the model. At the same time, the fair distribution of environmental responsibilities and policy uncertainty also increases the difficulty of implementation. However, these challenges provide important directions for future research, including combining multidimensional dynamic game models, integrating big data and artificial intelligence technologies, and exploring the application of game theory in policy making. Game theory provides a new theoretical and practical perspective for the management of the fast fashion industry chain. By optimizing the multi-party interaction and collaboration mechanism, game theory can help companies achieve a balance between economic benefits and environmental responsibilities, and provide a solid theoretical foundation for the green development and long-term sustainability of the fast fashion industry. In the future, through interdisciplinary collaboration and further improvement of the model, game theory will play a greater role in promoting the fast fashion industry to achieve a win-win situation of economic and environmental goals, and contribute to global sustainable development.

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Cite this article

Li,J. (2025). Application of Game Theory in the Fast Fashion Industry Chain: A New Path to Optimize Collaboration and Sustainable Development. Advances in Economics, Management and Political Sciences,165,114-120.

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Volume title: Proceedings of the 3rd International Conference on Management Research and Economic Development

ISBN：978-1-83558-953-3(Print) / 978-1-83558-954-0(Online)

Editor：Lukáš Vartiak

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Conference date: 30 May 2025

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.165

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