Differential Game Model of Fresh Supply Chain, Considering Preservation Efforts and Member Behavior Under Government Subsidies

Haiping Ren, Yuanda Xu, Lian Han and Xiaoqing Huang ()
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Haiping Ren: Teaching Department of Basic Subjects, Jiangxi University of Science and Technology, Nanchang 330013, China
Yuanda Xu: Business School, Jiangxi University of Science and Technology, Nanchang 330013, China
Lian Han: Business School, Jiangxi University of Science and Technology, Nanchang 330013, China
Xiaoqing Huang: Business School, Jiangxi University of Science and Technology, Nanchang 330013, China

Sustainability, 2025, vol. 17, issue 11, 1-33

Abstract: With the improvement of living standards, consumer demand for fresh produce has witnessed a remarkable upsurge. Fresh products present significant preservation challenges, as their freshness directly correlates with sales performance and ultimately impacts the sustainable development of the fresh supply chain. Enhancing freshness preservation standards, boosting market demand, strengthening brand reputation, and promoting the development of a fresh supply chain are urgent problems that need to be solved. This paper delves into the dynamic optimal decision-making processes within a fresh food supply chain, which is composed of a supplier and a retailer, under different government subsidy scenarios: centralized decision-making, decentralized decision-making under supplier myopia, and decentralized decision-making under supplier’s foresight. Herein, a differential game model is constructed, and through the utilization of dynamic optimization and backward induction techniques, feedback strategies for various decision-making paradigms are derived. A comparative evaluation of decision-making models is conducted, grounded in theoretical frameworks and substantiated through numerical simulations, to assess critical parameter impacts. The results indicate the following: (1) the effect coefficients of consumer preference and preservation efforts show significant positive correlations with suppliers’ preservation strategies and retailers’ promotional tactics, respectively; (2) supply chain profitability reaches its Pareto-optimal state under centralized decision-making structures, while myopic supplier behavior leads to systematically lower profits than foresighted supplier strategies; (3) retailers demonstrate stronger collaboration preferences toward foresighted suppliers, as such partnerships ensure enhanced quality consistency and supply continuity; and (4) government agencies should implement dynamically adjusted subsidy schemes during preservation initiatives to facilitate sustainable operational frameworks in fresh produce supply chains.

Keywords: preservation efforts; fresh supply chain; consumer preferences; myopia; differential game (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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