Abstract: The increasing global pollution and consuming resources promote industry and academia to pay attention to closed-loop supply chain. Adding recycling and remanufacturing to the traditional supply chain can effectively reduce resource consumption, so the development of closed-loop supply chain is guided by governments through subsidies.In view of the gap in previous studies, the decisions and contract selection of a closed-loop supply chain consisting of one manufacturer and two competing retailers under government subsidy are considered. The manufacturer acts as the leader of Stackelberg game in the supply chain and two retailers act as followers.Based on centralized decision-making, two decision models under different competitive behaviors of retailers are established, including Cournot duopoly game and Stackelberg game. According to different game sequences, and the equilibrium results of each model are obtained by reverse solution.Then the effects of competition behaviors, competition intensity and government subsidy on the optimal decisions and maximum profits are analyzed. Finally, the role of cost-sharing contract and revenue-sharing contract in the decisions of supply chain members is discussed when retailers adopt the Cournot duopoly game. Since a single contract cannot perfectly coordinate the supply chain, these two contracts are combined and improved to design a new contract that can achieve supply chain coordination.

Key words: closed-loop supply chain；government subsidy；competing retailers；game theory； contract selection