Abstract:In view of an exploration of the collusive fraud in the reverse supply chain under the background of green subsidies, under the assumption of bounded rationality, a tripartite game model has thus been constructed of the government, manufacturers and recyclers based on prospect theory, followed by a study on the behavior principle of manufacturers and recyclers conspiring to defraud the government’s green subsidies in the reverse supply chain, as well as an analysis of the key factors affecting the decision-making of the government, manufacturers and recyclers. Matlab is used for an example analysis to explore the relationship between equilibrium probability and various parameters. The results show that such factors as the governmental verification ability, penalty force, and verification cost exert a key impact on the collusive behavior in the reverse supply chain. For manufacturers and recyclers, remanufacturing costs and the spoils share are the main factors determining whether or not to take collusive risks. Finally, from the perspective of the government, suggestions are put forward for a collusive prevention from three aspects:verification ability, risk warning and penalty system improvement.