Despite many benefits, life-cycle analysis (LCA) is a limited tool from a sustainability perspective because it does not include the interdependent, dynamic, economics-driven choices made by stakeholders that may be unrelated to the environment but interact to affect the ultimate environmental outcome. We show that proven strategic modeling techniques from game theory can be applied to improve the usefulness of LCA for environmental policy-making. We test the model with a case study of open-loop (also known as out-of-network) pallet systems for shipping consumer goods. Environmental LCA inventories from previous studies show that pallet reuse is more critical than the pallet material; however, these results do not suggest how more reuse can be achieved. We show that current market conditions can provide an environmentally-preferred outcome if third-party pallet reuse facilities are located conveniently, and/or the purchase price of used pallets is lowered. More direct command-and-control environmental policiesthat ban pallets from landfills or require the take-back of pallets by distributors of consumer goods do not necessarily result in outcomes that are both environmentally and economically sustainable.