Research On The Government’s Subsidy Policy In The Green Supply Chain Based On Game Theory

With the global natural resources increasingly tense the environment conception increasing, in the field of supply chain management, green supply chain that based on cycle-economics and sustainable economic theory becomes the focus of academic world and enterprises. The enterprises implement green supply chain management effectively can bring tremendous economy benefit and strengthen its competition advantage, so as to protect the environment and achieve sustainable development of social economy. However, because our country is in the special course of economic transition, the implement cost of green supply chain management lead to the imbalance of input output, furthermore, it weakened their implementation willingness of the green supply chain. So it is necessary for government to give proper financial subsidies in order to accelerate the application and promotion. Then how to choose and determine the optimal subsidy strategy for green supply chain is urgent to be solved.Aiming at this problem, this paper referred developed country’s research results and practical experience; combined with the development characteristics of our country’s green supply chain, used game theory and optimization theory, adopted method which combined qualitative and quantitative analysis, constructed government-company game model under different situation, at this basis, discussed the optimal subsidy strategy according to different objects, also provided reference for government making relative environmental protection law.The main research contents were:expatiated the background and related definitions of green supply chain theory, qualitative analyzed the architecture of green supply chain, constructed the green supply chain management framework model, set up the foundation for subsequent research. Secondly, this article systematically analyzed the connotation of product differentiation; built government-company Stackelberg game model based on the difference of green utility; discussed the government’s optimal subsidy policy for green production. Furthermore, this paper described retailer’s marketing mode in green supply chain, built the retail market’s evolution game model, analyzed the marketing strategy for retail market, and proposed the applicable conditions for government to carry out subsidy policy for green retailers. Moreover, this paper focused on the recycling patters of closed-loop supply chains, built up the green supply chain model in the background of manufacturers charging for the recycling, discussed the validity of government’s subsidy for the manufacturers who carry out recycle. Finally, the article constructed multi-stage game model for green supply chain which was composed by manufacturer, Cournot competition retailer, third-party recycler and government, contrast analyzed different government regulation policy’s impacts on the social welfare, and some key factors impacts on the profits of supply chain members. The research result can be a reference for the making of government’s environmental policy.The research innovation of this paper can be list as follows:(1) Based on product differentiation and classical game theory, combined with factors such as:government subsidies, level of product’s green utility, product completion, customers preference of green utility, built up the Stackelberg government-company game model between common product manufacturer, green product manufacturer and the government, use retrograde induction method to analyze the demand function of green product and common product in the green supply chain, so as to the manufacturer’s optimal decision and the government’s optimal subsidy strategy.(2) Combined with customer’s preference and the retailer’s forces, this paper constructed space difference model for those retailers who had different forces in the green supply chain based on Hotelling model, analyzed the income of various combination of duopolistic retailer’s marketing strategy, obtained the stable state of duopolistic retail market’s revolution in the green supply chain, thus put forward the applicable condition of the government regulation in retail market under green supply chain management.(3) In order to research the issue of government subsidy in the green supply chain that the manufacturer take-back, introduced the government subsidy factor, this paper built green supply chain government-company game model. Used this model, this paper compared the optimal equilibrium decision results in the green supply chain under four cases:the manufacturer didn’t implement recycling and remanufacturing, the manufacturer implemented recycling and remanufacturing, the government adopted subsidy strategy that based on recovery amount, the government adopted subsidy strategy that based on recovery ratio, then, the government’s optimal subsidy policy in manufacturer take-back green supply chain was obtained.(4) To evaluate the government’s optimal subsidy and taxation strategy in the third-party take-back green supply chain, this article established the multi-stage green supply chain that composed by manufacturer under Cournot competition, retailer, third-party collector and the government. By using this model, this paper discussed the supply chain coordination issues under benefit-sharing contract, and applied KKT optimization theory to find out the government’s environmental regulation strategy. Finally, through the numerical examples analysis of relative industries, investigated the relationship between social welfare and government’s regulation by using the sensitivity of numbers, compared the influence on supply chain members’profit that came from the products’marginal environmental cost.