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We discuss the government's reward and penalty mechanism in the presence ofasymmetric information and carbon emission constraint when downstream retailerscompete in a reverse supply chain network. Considering five game models whichare different in terms of the coordination structure of the reverse supplychain network and power structure of the reward-penalty mechanism: (1) thereverse supply chain network centralized decision-making model; (2) the reversesupply chain network centralized decision-making model with carbon emissionconstraint; (3) the retailers' competition reverse supply chain networkdecentralized decision-making model; (4) the retailers' competition reversesupply chain network decentralized decision-making model with carbon emissionconstraint; (5) the retailers' competition reverse supply chain networkdecentralized decision-making model with carbon emission constraint and thegovernment's reward-penalty mechanism. Building the participation-incentivecontract under each model use the principal-agent theory, and solving the modeluse the Lagrange multiplier method. We can get the following conclusion: 1)when the government implements the reward-penalty mechanism for carbon emissionand recycling simultaneously, the recycling rate as well as the buy-back priceoffered by the manufacturer are higher than those when the government conductsreward-penalty mechanism exclusively for carbon emission; 2) when thegovernment implements carbon emission constraint, both retailers' sellingprices of the new product are higher than those when no carbon emissionconstraint is forced; 3) there is no certain relationship between the tworetailers' selling prices of the new product when the government implements thereward-penalty mechanism only for carbon emission and when it implements themechanism for carbon emission as well as recycling.

Reward-penalty Mechanism for Reverse Supply Chain Network with Asymmetric Information and Carbon Emission Constraints