The Impacts of Government Subsidies and Consumer Preferences on Food Supply Chain Traceability under Different Power Structures

Weixia Xue and Zhiduan Xu ()
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Weixia Xue: School of Management, Xiamen University, Xiamen 361005, China
Zhiduan Xu: School of Management, Xiamen University, Xiamen 361005, China

Sustainability, 2022, vol. 15, issue 1, 1-20

Abstract: After the outbreak of the COVID-19 pandemic, the sustainability of the food supply chain (FSC) was greatly challenged. Enterprises and governments have taken various measures to enhance the resilience of the FSC and to achieve sustainable development. Product traceability systems are an important tool for improving the resilience of the FSC and for dealing with its risks. In this study, we developed a two-stage supply chain consisting of a manufacturer and a retailer to investigate how government subsidies, power structures, and consumer preferences affect the decisions involved with FSC traceability. Manufacturer–Stackelberg (MS) and retailer–Stackelberg (RS) power structures—with and without government subsidies—were constructed using game theory, and the equilibrium solutions of the four models were compared and analyzed. The research shows that (i) government subsidies have a positive effect on FSC traceability investments, benefiting both the manufacturer and the retailer; (ii) a retailer-dominated supply chain is more conducive to product traceability, which will benefit the retailer, and when the consumer traceability preference reaches a certain threshold, the manufacturer will also benefit; and (iii) government subsidies have a significant incentivizing effect on retailer-dominated supply chain traceability. Finally, we provide an example to analyze and compare the differences between decision-making processes and profits under various consumer preference scenarios. In conclusion, the government should provide subsidies, and the retailer needs to dominate the supply chain and improve consumer traceability preferences. The research in this paper provides insight into the implementation of traceability in the FSC for management.

Keywords: supply chain traceability; government subsidy; power structure; consumer preference (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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