Third-party remanufacturing modes with integrated tax-subsidy policy

Tax-subsidy policy is a common government intervention mechanism to stimulate firms taking part in sustainable remanufacturing operations. Focusing on the third-party remanufacturing strategy (outsourcing or authorisation), this paper develops game models to study the trade-offs between manufactures and third-party remanufactures. Unlike the existing literature, we particularly include the feature of green consumers and the government intervention into the analytical model. The findings of this paper include: 1) manufactures choose authorisation when consumers show no green preferences; 2) third-party remanufactures need actions to improve green consumer preference for achieving high profit; 3) when unit carbon tax is high, manufacturers select authorisation; otherwise, outsourcing; 4) outsourcing strategy is beneficial to environmental sustainability and social welfare. [Submitted: 8 September 2021; Accepted: 17 July 2022]