Abstract: In order to develop recycling economy and realize sustainable development of human society, many countries have issued recycling regulations with the nature of reward and punishment. Under the regulations of reward-penalty, more and more manufacturers begin to recycle their waste products through retailers and then remanufacture them. However, the retailer's information of recycling cost is private and cannot be observed by the manufacturers accurately, which will reduce the performance of recycling operations and supply chain. Hence, in order to solve this problem, incentives contracts are designed by using information-screening model. In detail, the following questions are investigated: How to design the information screening contracts of the manufacturer? Whether is it necessary for the manufacturer to provide information-screening contracts to the retailers of all cost types? What are the characteristics of the information-screening contracts and the impact of information asymmetry? What are the impacts of mechanism of reward-penalty on the information-screening contracts and other equilibria results? A Stackelberg model between the manufacturer and the retailer is constructed. The manufacturer first provides a two-part contract menu to the retailer. Second, the retailer declares its cost type base its true cost information, and then decides sale price and collect rate. The model is solved by the methods of standard backward induction, i.e., first the retailer's optimal decisions are solved and then the manufacturer's optimization problem is solved, which includes the incentive compatible constraint and the individual rational constraint. Through using the principal-agent theory, revelation principle and optimal control theory, the optimal two-part contract menu and other equilibrium outcomes are derived. Based on these results, other questions are further investigated by comparison analyses and sensitivity analyses.The results show that as the retailer's collection efficiency decreases, the manufacturer increases the whole price and decreases the transfer payment. The profits of the manufacturer and the supply chain decrease and the profit of the retailer increases due to the asymmetric information of collection cost. Moreover, the execution of the reward-penalty mechanism induces the manufacturer to decrease the whole price and to increase the transfer payment. Furthermore, when the government's requirement of collection is high and the level of reward-penalty is low, the execution of the reward-penalty mechanism decreases the supply chain's profit; otherwise, the supply chain's profit increases.

Key words: closed-loop supply chain, mechanism of reward-penalty, information asymmetry, contract designing