Abstract: This paper considered consumers' remanufacturing product buying behavior under the government subsidy to examine the closed-loop supply chain (CLSC) consisting of a single manufacturer and a single retailer. Based on the government replacement subsidy policy, we constructed different CLSC models with and without the government replacement subsidy and in which the new product and remanufacturing product were sold through different channels. Then, we discussed the impacts of the government replacement-subsidy on the decisions and profits of CLSC system and its members by the method of game theory. The research showed that: (1) compared with the CLSC models without the government subsidy, the single replacement consumer, whole replacement consumers, manufacturer, CLSC system and social environmental benefits all benefited from the government replacement-subsidy; the single initial consumer, whole initial consumers and retailer were damaged from the government replacement-subsidy; (2) The government replacement-subsidy can effectively promote the sales of remanufacturing products and recycling of waste products, and expand the market shares of remanufacturing product, and then realize the reusing of resources and the goals of policy, achieve the double-win situation of the economic and environmental benefits at last; and (3) The game ability of the manufacturer and the retailer affected the stability of dual-channel sale CLSC and the profit level of the retailer, so setting a reasonable subsidy proportion and making out other related policies to make up for the utility loss of the initial consumer and the retailer become an important area of the government and manufacturer should focus on. At last, the numerical analysis method was adopted to verify the effectiveness of the models and the correctness of the conclusions.

Key words: closed-loop supply chain, government subsidy, replacement, pricing, dual-channel sale