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Repatriates’ experience and knowledge is important competition advantage for the parent company in international business. This paper discussed repatriates’ incentive mechanism based on the perspective of knowledge transfer, established theoretic model of repatriates’ knowledge transfer incentive mechanism, and pointed out that knowledge transfer was a process of repeated game between the parent company and the repatriates, the establishing of knowledge transfer incentive mechanism was trying to reach the equilibrium of the game, it provided theoretic basis for promoting repatriates’ knowledge transfer effectively