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Stackelberg game analysis of government subsidy policy in green product market

Author

Listed:
  • Xin Chen

    (Sanjiang University)

  • Jiannan Li

    (Nanjing University of Information Science & Technology)

  • Decai Tang

    (Sanjiang University
    Nanjing University of Information Science & Technology)

  • Ziqian Zhao

    (Nanjing University of Information Science & Technology)

  • Valentina Boamah

    (Nanjing University of Information Science & Technology)

Abstract

With the development of the digital economy, digital technology can help enterprises achieve digital, intelligent, and green transformation. However, the cost of enterprise transformation is high, and government subsidies can help reduce enterprise risks. In this study, based on the Stackelberg game model, a three-stage game model was established for government, manufacturer, and retail. Through theoretical proof and numerical simulation, the effects of cost subsidies, research and development subsidies, and sales subsidies policies were analyzed. The research shows that these three subsidy methods can promote the greening of products, increase market sales, and increase the profits of manufacturers and retailers, and the effect of R&D subsidies is more obvious. Excessive R&D subsidies will cause the social welfare function to decline. As consumers’ green preferences increase, the profits and social welfare of manufacturers and retailers also increase. Consumers’ green preferences can effectively improve the green level of products, increase product sales, and promote the development of green products. Under the optimal subsidy strategy, cost and sales subsidies are superior to R&D subsidies. By studying the effects of different subsidy policies, this study provides reasonable policies and suggestions for the government and the manufacturing industry.

Suggested Citation

  • Xin Chen & Jiannan Li & Decai Tang & Ziqian Zhao & Valentina Boamah, 2024. "Stackelberg game analysis of government subsidy policy in green product market," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(5), pages 13273-13302, May.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:5:d:10.1007_s10668-023-04176-y
    DOI: 10.1007/s10668-023-04176-y
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