Effects of double subsidies and consumers’ acceptability of remanufactured products on a closed-loop supply chain with trade-in programs

The insufficient economic incentives for consumers and their limited acceptance level for remanufactured products have hindered enterprises from implementing "trade old for new" (TON) and "trade old for remanufactured" (TOR) programs. To address this dilemma, the government has gradually introduced TON and TOR subsidies, but this has also complicated the operational decisions of closed-loop supply chain (CLSC) members. As such, our study aims to investigate the joint effects of double subsidies and consumers' acceptability of remanufactured products (CARP) on the rebate decisions and economic-environmental-social performance of CLSC. The results reveal that these external interventions have complex interactive effects on rebate decisions. When TON (TOR) subsidies and CARP are both high, greater (lower) rebates should be set. The profit of the entire supply chain under double subsidies is higher than that under a single subsidy if the residual value of recycled products is high. However, such incremental benefit comes at the expense of sacrificing the retailer's profit. From a societal perspective, higher TOR subsidy levels are not always beneficial for increasing social welfare, unless CARP is extremely low. Similarly, greater TON and TOR subsidies may not invariably reduce environmental damage, as this is contingent on CARP and the environmental impact discount of remanufactured products. Our findings construct a theoretical basis for enterprises to make optimal rebate decisions and for the government to optimize subsidy policies.