Collection and Remanufacturing of Waste Products under Patent Protection and Government Regulation

There is increasing academic and pragmatic interest in leveraging patent rights to invigorate remanufacturing for waste products under governmental interventions via regulations and reward–penalty instruments. In practice, many original manufacturers that are possessed with intellectual property rights allow third-party remanufacturers to implement reproducing operations through authorization and charging licensing fees. The general purpose of this paper is to explore favorable strategies for a closed-loop supply chain (CLSC) system of waste product collection and remanufacturing, in the context of either manufacturer-remanufacturing or remanufacturer-remanufacturing. To achieve such an objective, game theory is adopted to establish models of three collection and remanufacturing modes among channel members involving a manufacturer, a seller, and a remanufacturer. In so doing, the results show that a government’s allocations of elementary remanufacturing ratio and the unit amount of reward–penalty count significantly in CLSC operations, especially for the manufacturer, who acts as the leader in the system and makes mode selections.