Incentive Mechanism Between Government And Remanufacturing Industry Based On Circular Economy

As the fast development of the economy,the conflict between the strong demand for fossil fuel and the shortage of nonrenewable energy resource has emerged.Both human society and economic society have been challenged by climate problem and resource depletion issue.After years of studies and practices,all parties have reached a consensus and proposed some solutions.One solution is to turn the out-of-date economic development pattern into a new sustainable one.The other is to curb carbon emissions of manufacturing industry as it is the biggest carbon emitter among all fields non-controversially.Accelerating development of remanufacturing is also been concerned for the reason that it not only enhances resource utilization rate but mitigates environmental pollution.Increasing number of scholars pay their attentions on the issue that the design of incentive mechanism between government and remanufacturing industry.Given all these,the article researches this problem by the use of literature review method,game analysis and example analysis based on the existed research results.The main content and conclusions are summarized as follows.(1)The incentive mechanism between government and duopolistic recyclers based on collection competition.Under the condition of adverse selection as well as moral hazard,taking collecting ability as the asymmetric information,the contract between government and duopolistic recyclers is designed.The relationships between parameters and government's subsidy contract are analyzed.The influences of asymmetric information and the degree of competitiveness to government s expected utility and the duopolistic recycler's expected benefits are discussed.(2)The incentive mechanism between government and the remanufacturer implementing low carbon strategy.Under the condition of adverse selection as well as moral hazard,taking emission reduction ability as the asymmetric information,the contract between government and remanufacturer implementing low carbon strategy is designed.Establish models for both the situation with complete information and the situation with incomplete information and compare these two models.The relationships between parameters and government's subsidy contract are analyzed.The influences of asymmetric information and the degree of competitiveness to government's expected utility and the remanufacturer's expected benefits are discussed.This paper focuses on the incentive mechanism between government and remanufacturing industry.The conclusions offers government theoretical references in how government provides subsidies to the industry who needs support.