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dc.contributor.authorZhou, Qinen_US
dc.contributor.authorYuen, Kum Faien_US
dc.identifier.citationZhou, Q., & Yuen, K. F. (2020). Analyzing the effect of government subsidy on the development of the remanufacturing industry. International Journal of Environmental Research and Public Health, 17(10), 3550-. doi:10.3390/ijerph17103550en_US
dc.description.abstractRemanufacturing plays an important role in a circular economy, by shifting supply chains from linear to closed loop. However, the development of the remanufacturing industry faces many challenges. Consumers’ uncertainty about the quality of remanufactured products can hamper their decision to make a purchase (i.e., uncertainty behavior). Such uncertainty can be reduced when they learn that more consumers are purchasing remanufactured products (i.e., network externality behavior). Considering the aforementioned behaviors, this paper investigates how a government could set the optimal subsidy level to maximize the sales quantity of remanufactured products with a limited budget. We modeled a Stackelberg game between the government and an original equipment manufacturer, under two settings, over two periods. Setting 1 only considers an original equipment manufacturer that produces remanufactured products, and Setting 2 considers an original equipment manufacturer that produces both new and remanufactured products. We show that the original equipment manufacturer should adjust its pricing strategy (i.e., markup vs. markdown) according to the subsidy levels. Our analysis on the government budget constraint shows that an original equipment manufacturer earns more profits in Setting 1 than Setting 2, only when the budget constraint is high, and less profits when budget constraint is low.en_US
dc.description.sponsorshipNanyang Technological Universityen_US
dc.relation.ispartofInternational Journal of Environmental Research and Public Healthen_US
dc.rights© 2020 The Authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (
dc.subjectEngineering::Civil engineeringen_US
dc.titleAnalyzing the effect of government subsidy on the development of the remanufacturing industryen_US
dc.typeJournal Articleen
dc.contributor.schoolSchool of Civil and Environmental Engineeringen_US
dc.description.versionPublished versionen_US
dc.subject.keywordsCircular Economyen_US
dc.subject.keywordsTrade Old For Remanufactureden_US
dc.description.acknowledgementThis research was funded by Nanyang Technological University, Internal Funding, Start-Up Grant, College of Engineering.en_US
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