Analysis of Competition and Cooperation Between a Manufacturer and a Remanufacturer Under Carbon Tax Policy Based on Game Theory

Purpose/Significance As the economic and environmental benefits of remanufacturing become more visible, increasing number of enterprises enter the remanufacturing field to compete or cooperate with the original manufacturers. Given the constraints of carbon emissions, companies are faced with more complex production decisions. Design/Methodology Based on consumers’ heterogeneous demands for new products and remanufactured products, the game model of competition and cooperation between a manufacturer and a remanufacturer is established to explore the impact of carbon tax on manufacturing/remanufacturing decisions. Numerical simulation is adopted to analyze the impact of carbon tax on corporate profits and carbon emissions under the models of competition and cooperation. Findings/Conclusions The results show that enterprises can choose different production strategies according to the carbon emission intensity of remanufactured products; carbon tax is always inhibiting the production of new products; carbon tax can promote the production of remanufactured products when the carbon emission intensity of remanufactured products is less than a certain value; the competition from the remanufacturers is not to the benifit of new products, reducing the manufacturers’ profits and raising the threshold for remanufacturing; the cooperation model can achieve both economic and environmental benefits when the carbon tax does not exceed a certain limit.