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Government subsidies-based profits distribution pattern analysis in closed-loop supply chain using game theory

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Abstract

In closed-loop supply chain, the profits distribution pattern tends towards a comparatively stable status due to complete market competition. However, after introducing government subsidies, the former profits distribution pattern will be destroyed and tend towards a new one. This paper studies differences between the two statuses in the background of new replacement policy of household appliances in China using game theory. We develop two profits distribution models under no government subsidies and under government subsidies in closed-loop supply chain. By comparing the members’ profits distribution in the two models, we find that government could control the profits distribution pattern by adjusting government subsidy rate. In addition, we show that average of subsidies, subsidy rate and subsidy limit influence the effects of government subsidies policy significantly.

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Acknowledgements

This work was supported by Project of Humanities and Social Sciences of Education Ministry (No. 14YJCZH218), Young Teacher Support Program, Shanghai (10-15-303-801), the National Natural Science Fund (71771151) and Doctoral Scientific Research Foundation (1D-10-303-002).

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Correspondence to Na Sun.

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Zhao, J., Sun, N. Government subsidies-based profits distribution pattern analysis in closed-loop supply chain using game theory. Neural Comput & Applic 32, 1715–1724 (2020). https://doi.org/10.1007/s00521-019-04245-2

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