Short- and long-term repeated game behaviours of two parallel supply chains based on government subsidy in the vehicle market

Binshuo Bao, Junhai Ma and Mark Goh

International Journal of Production Research, 2020, vol. 58, issue 24, 7507-7530

Abstract: In response to environmental protection policies issued by the United Nations Environment Program, battery electric vehicles (BEVs) have been developed. This paper studies the short- and long-term repeated game behaviours of two parallel supply chains involving duopoly vehicle manufacturers producing BEVs and fuel vehicles (FVs). Taking consumers’ low-carbon preference and government subsidy scheme into account, optimal decisions and comparative analyses under the three game strategies of non-cooperative game and cooperative game and cost-sharing contract under supply chain coordination have been conducted. In the short-term game supply chain, three game models (non-cooperative, cooperative and cost-sharing contract) are formulated and three optimal decisions are compared. In the long-term repeated game supply chain, the dynamic behaviours of two parallel supply chains under non-cooperative game are analysed. We uncovered that the prices of BEVs are more dependent on the reduction of carbon emissions and government subsidy than FVs. In addition to supply chain coordination, consumers’ low-carbon preference also improves the total profits of the three game models. Furthermore, the adjustment speed of the eco-friendly level of BEVs has the most significant impact on the vehicle market.

Date: 2020
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DOI: 10.1080/00207543.2020.1711988

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