Impact of Subsidy Policy on Remanufacturing Industry’s Donation Strategy

Motivated by the donation subsidy policy, this paper studies a supply chain consisting of manufacturer and remanufacturer. The sells new remanufactured products can also donate two products. remanufacturer only sell Using Stackelberg game model, we investigate optimal production strategies competing firms discuss how policy affects these strategies. Our main results include following: First, are not affected subsidies but could be influenced competitor’s decision, especially when is high. Second, subsidized for sale in market will decline as increases. Therefore, high always causes insufficient supply. Third, first-mover advantage may make avoid dilemma; however, becomes leader market, help prevent any competitor threats. Lastly, scenario where donates nothing seems to Pareto improvement firms, stable, last equilibrium that both decide