Abstract: In order to compare the reward-penalty mechanism and the tax-subsidy mechanism for increasing the efficiency of reverse supply chain^, collection rate. Three models are established and the results are compared. The three models are no government intervention mechanism, the reward-penalty mechanism and the tax-subsidy mechanism case using the dynamic game theory.This study shows that: the collection rate is increasing with the increase of the remanufacture cost advantage in the three models, and among them, the highest collection rate incurs under the reward-penalty mechanism. When the manufacturer has remanufacturing cost has advantage, the profit of manufacturers and recycler increases with the increasing of the remanufacture cost advantage, and the collection rate increase with the reward-penalty mechanism is the highest among the three models. The manufacturer's buy-back price rises with the increase of the reward-penalty intensity and remanufacture cost advantage, while it decreases with the increasing of the per-unit subsidy and remanufacture cost advantage. It can be safely concluded that the reward-penalty mechanism is the most effective way to encourage the manufacturers, recyclers and consumers. Finally a numerical example is given to prove the above conclusions.

Key words: the reward-penalty mechanism, the tax-subsidy mechanism, collection and remanufacture