Remanufacturing Strategy under Cap-and-Trade Regulation in the Presence of Assimilation Effect

In this paper, we consider the choice of remanufacturing strategy a monopolist original equipment manufacturer under cap-and-trade regulation in presence assimilation effect. We model manufacturer’s optimal decision-makings and associated profits three different strategies. Our results indicate that effect reduces motivation to become engaged remanufacturing. Specifically, there exists threshold for intensity enter First, when is below threshold, should choose remanufacture. Otherwise, only produce new products. Second, value further determined by remanufacturing’s emission advantage carbon trading price. addition, high enough, price no longer impacts strategy. Lastly, our numerical examples reveal ignoring can lead up 56.2% loss potential profit manufacturer.