This paper studies the price strategy of two-echelon manufacturer-driven closed-loop supply chain under the governmental incentives. The Stackelberg game model in which the manufacturer acts as the leader while the retail plays as the follower is constructed. Finally a numerical example is presented to verify the theoretical modeling and solving. Some conclusions are drawn from the numerical analysis: firstly, as the improvement of the governmental incentives, the collection rate of the retail increases until it is equal to 1; secondly, the parameters of price strategy such as wholesale price, retail price, collecting price and return price would change as the improvement of the governmental incentives. As a result, the profits of manufacturer and retailer will also change. The manufacturer can takes advantage of its dominant position to gain more benefits, while the retail's profits would decrease after governmental incentives.
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