Which group should governmental policies target? Effects of incentive policy for remanufacturing industry

Abstract

Although previous research ignores other subsidy groups, we conduct a comprehensive study. In our closed-loop supply chain (CLSC) model, the manufacturer can produce either new products or remanufactured products of end-of-life (EOL) products recycled by independent recyclers. Our core objective is to explore the pricing strategies of the two products under different government subsidy plans and which groups the government subsidy plans should target. Considering the consumers' discount perception and uncertainty of recovery rate, we construct four game models: (1) no subsidy (Scenario N); (2) subsidy for the manufacturer (Scenario M); (3) subsidy fof the four models. We also compare the profits and social welfare in these four models and find that the Scenario C has the most significant improvement in enterprise profits and social welfare compared to other models. r the recycler (Scenario R); (4) subsidy for consumers (Scenario C). We first obtain the equilibrium strategies oFinally, in scenario C , when consumers' discount perception increases, the quantity of new products first rises then falls, and the quantity of remanufactured is on the contrary.

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