The choice of recycling strategies for decision-makers based on government subsidy and service budget

The product service has become one of the key factors to maintain market competitiveness. Therefore, how to balance the service budget and the profits are especially important for enterprises. Besides, the service has catalyzed the upgrading of products, which puts tremendous pressure on both resources and the environment. Therefore, how the government formulates policies to encourage recycling parties to play a vital role in alleviating these problems. This paper establishes Stackelberg game models in three scenarios of manufacturer recycling, retailer recycling, and third-party recycling with service budget constraints; meanwhile, we also explore the impact of service budget and government recycling subsidy on equilibrium results and the selection of recycling strategies. By analysis, when a recycling subsidy is given, the recycling rate in Scenario R under any service budget is always the highest. But the retailer’s profit in this scenario only has a weak advantage when the service budget is large enough. For the same social welfare goal, the retailer recycling scenario can achieve the goal the fastest. If recycling subsidy and service budget can be observed, the manufacturer is more willing to entrust recycling activities to the retailer. But the retailer will only participate in recycling activities when the service budget is large enough. Our research can provide decision-making references and scientific support for the retailer, the manufacturer, and the government.