Abstract: In order to explore the best remanufacturing authorization model in the market with heterogeneous consumer demand, based on the closed-loop supply chain (CLSC) in which the original equipment manufacturer (OEM) and the third party remanufacturer (TPR) remanufacture simultaneously, the CLSC decision-making model of TPR independent remanufacturing and OEM patent authorization remanufacturing (including unit fee authorization and fixed fee authorization) are separately discussed using game theory, the equilibrium solution and optimal profit of the three models compared, and the effects of market acceptance of TPR remanufacturing and remanufacturing cost saving on equilibrium solution and enterprise profit analyzed. The results show that: authorization increases OEM profits, so OEM prefers to authorize TPR and decide the authorization mode according to the size of fixed license fee; the total profit of CLSC is the largest under the fixed fee authorization mode, and the purchase cost of consumers is the lowest under this mode; the increase of TPR remanufacturing market acceptance and remanufacturing cost saving can improve TPR profit, but it will increase the run on OEM remanufactures, and eventually lead to the increase of OEM licensing fee to make up for the loss of profits.

Key words: patent authorization, heterogeneous demand, remanufacturing, game theory