Influence of Government Subsidy on Remanufacturing Decision under Different Market Models

Abstract EN

This paper considers a remanufacturing closed-loop supply chain involving a manufacturer and an independent remanufacturer.

First, it analyzes the decision-making changes under three market leadership (manufacturer leadership, remanufacturer leadership, and no leadership) models before and after government subsidies.

Considering the government’s goal of maximizing social welfare, the study establishes a two-stage game model for the government’s optimal price subsidy.

It also considers the effects of consumer environmental preferences on product prices, demand, profits, government subsidies, and social welfare under different market models.

The study found that government subsidy effectively stimulates the demand for remanufactured products, reduces the price of both new and remanufactured products, and promotes the remanufacturing industry.

Furthermore, improvement in consumer environmental awareness was found to enhance the government’s optimal subsidy.