Study on longitudinal emission reduction investment of supply chain and government’s subsidy policy

Abstract

 The relation between longitudinal emission reduction investment of supply chain enterprises and the government’s subsidy policy is studied in this paper, the game model against subsidy of the government for emission reduction investment of manufacture and retailer is developed. This study analyzes the optimal investment of enterprises and the optimal emission reduction subsidy of the government under the Nash and Stackelberg game conditions. The results show that the government’s emission reduction subsidies for two parties on the supply chain, as well as the benefits to such two parties, are affected by the cooperative relationship in the supply chain. That is, manufacturer and retailer are in the highest position in the Nash game, followed by the Stackelberg game and the lowest in central decisions. Comparing the subsidy differences of the government in the emission reduction investment by manufacturer and retailer under different force structures, the longitudinal emission reduction investment in the supply chain and the government’s subsidy policy under different game conditions are concluded.