Differential Game Analysis of Emission Reduction and Preservation in the Tertiary Food Supply Chain under Different Government Subsidy Models

Jing He and Ting Yang ()
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Jing He: College of Economics and Management, Shanghai Ocean University, Shanghai 201306, China
Ting Yang: College of Economics and Management, Shanghai Ocean University, Shanghai 201306, China

Sustainability, 2022, vol. 15, issue 1, 1-16

Abstract: Climate change has brought about huge environmental problems and economic losses worldwide, and low carbon has become a hot topic of research in the context of the climate crisis. The article outlines a three-tier food supply chain consisting of suppliers, manufacturers and retailers, based on a cooperative model in which manufacturers share the cost of emission reduction and retailers share the cost of freshness. The study finds that when the government grants the maximum amount of subsidies to the manufacturer, the government’s decision to reduce emissions, the government’s regulations to preserve freshness, and the government’s profits are not affected. The study found that when the government awarded the largest subsidy coefficient to manufacturers and the smallest subsidy coefficient to retailers, the non-specific one-off government subsidy model could lead to higher profits for suppliers, manufacturers, and retailers, increasing the amount of emission reduction while improving the preservation quality of food. When the government subsidy factor for manufacturers is minimal, the reduction in emissions is greater under the government’s dedicated abatement subsidy model but does not increase the freshness quality of the food; food supply chain players consistently produce higher levels of preservation effort and preservation quality under the government’s non-dedicated one-off subsidy model.

Keywords: dedicated abatement allowance; one-time subsidy; emission reduction and preservation of quality; differential gaming (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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