Abstract: With the environmental harm caused by Waste Electrical and Electronic Equipment (WEEE) becoming more and more serious, recycling activities have become important ways to promote the environment and economy. However, fewer enterprises spontaneously participate in the closed-loop supply chain (CLSC) due to the limitations of technology and funds, which leads to the implementation of incentive mechanism by the government to encourage enterprises to recycle. Then, manufacturers consider not only their profits but also the profits of retailers and recyclers to maintain the stable operation of CLSC. Thus, considering the impact of government incentive mechanism and the altruistic concerns, three decision-making models of the closed-loop supply chain (CLSC) are constructed, namely, decentralized decision-making models with and without manufacturers' altruistic concerns and centralized decision-making model. The optimal decision on recycling and the optimal decision on government incentive mechanism are given. Then, the influences of government incentive mechanism and manufacturer’s altruistic concerns on these decisions are discussed. Moreover, the optimal reward decision of the government under two kinds of decentralized decision is solved and analyzed. On this basis, the ‘quantity discount joint fixed fee-cost sharing’ contract is designed to achieve system coordination. Finally, numerical analysis is employed to verify conclusions.

Key words: altruistic concern; government incentive mechanism; closed-loop supply chain; coordination of supply chain