Decisions In A New-energy Product Supply Chain With Behavioral Factor Considerations Under Government’s Subsidies

With more and more attention paid to environmental protection issues,people hope to use renewable and clean energy such as solar energy and wind energy to replace conventional fossil fuels like gasoline,diesel,etc.Generally,products that can reduce the use of fossil energy can be called new-energy products,such as new-energy vehicles using Hydrogenic energy,solar energy or electric energy to replace fossil energy,and photovoltaic equipment transfering solar energy into electric energy.In recent years,new-energy products have developed rapidly with policy support.Governments in many countries have provided subsidies to consumers to increase product sales volume.In the market environment with many uncertain factors as well as diverse sales channels and sales modes,consumer behavior and firm decision makers’ behavior can affect decision making and product sales of the firms,and thus,are also important considerations for government subsidy policy design.Although there is fruitful research on supply chain decisions with consideration of subsidy policy or behavioral factors,few studies have combined these two streams,and there are still some interesting issues worth exploring.Therefore,based on the background of government subsidy policies,this dissertation takes into account consumers’ strategic purchase behavior and firm decision makers’ risk-averse behavior,and analyzes new-energy product supply chain decisions,aiming to provide a theoretical guidance for firms’ decision making and governments’ policy design.The specific content and conclusions are as follows.First of all,this dissertation considers consumers’ strategic behavior in choosing way of purchase.Most existing research singly analyzes governments’ purchase subsidy or trade-in subsidy,while this dissertation compares these two policies.We study a dual-channel supply chain where a manufacturer sells products through two different retailers in physical channel and electronic channel respectively.We devide the market demand by analyzing the consumer’s strategic channel selection and choice between merely buying new products and trading in old products.A game model is established to analyze the optimal pricing decision of each firm in the supply chain.We compare the two policies from perspectives of consumers,enterprises,environmental benefit,and social welfare,and analyze the difference in performance between the two policies.Our research shows that purchase subsidies are good for both primary consumers and trade-in consumers,while trade-in subsidies are beneficial to trade-in consumers,but hurt primary consumers.Both of these subsidies are conducive to increasing firms’ profits,but they intensify channel competition.Which kind of subsidy is better for the firms is related to the amount of subsidy,the potential recycling market size,the recycling price,and the upper limit of the valuation of obsolete products.Purchase subsidies are more efficient in improving firms’ profits and social welfare,while trade-in subsidies are more efficient in improving environmental benefits.Secondly,this dissertation considers consumers’ strategic behavior in timing of purchase and studies government’s intertemporal purchase subsidies under production cost reduction uncertainty.Research on governments’ multi-period purchase subsidies has rarely considered consumers’ strategic behavior,and most has assumed that policies are quoted in advance.This dissertation takes strategic consumers into account and compares governments’ commitment policy with dynamic policy.We establish a two-period model to analyze the dynamic pricing of a manufacturer and the government’s subsidy decisions under the two policy schemes.Through comparison of the two policy forms,it is found that from the perspective of social welfare,under the uncertainty of cost reduction,dynamic policy is superior to commitment policy because it brings higher consumer surplus.Manufacturers generally also obtains higher profits under the dynamic policy,unless the cost reduction variance and fixed cost reduction are sufficiently small;In this case,the subsidies under the dynamic policy are lower,which reduces the manufacturer’s profititability from the government subsidy.Next,this dissertation considers the situation in which there is uncertain demand and both upstream and downstream decision makers of a supply chain are risk-averse.We aim to study the impact of firm decision makers’ risk-averse behavior on government’s purchase subsidy decisions,under different channel distribution modes.Specifically,four modes are compared: fixed-price direct sales,fixed-price indirect distribution,fixed-volume indirect distribution,and fixed-volume direct sales.Literature on purchase subsidy policy design has rarely considered the risk aversion behavior of firm decision makers.This dissertation combines firm decision makers’ subjective risk attitude with different objective risk situations.We established a government-enterprise game model to analyze supply chain pricing and service level decisions as well as government subsidy decisions.This study found that under the fixed-price modes,when the firm deicision makers are more risk-averse,they tend to lower unit profit and induce more sales,so the government can reduce the amount of subsidies;Under the fixed-sales modes,when the firm decision makers are more risk-averse,they tend to limit sales volume and set a higher price,so the government needs to increase subsidies.Government subsidies offset the double marginalization effect on sales,making the firm decision makers’ utilities higher under the indirect distribution modes than under the direct sales modes,but the government’s subsidy expenditure is also higher under the indirect sales modes.From the perspective of social welfare,under the fixed-price sales modes,the comparison between direct sales and indirect distribution depends on the risk-averse degree of the firm decision maker who is responsible for sales.The more risk-neutral the decision maker,the higher the social welfare.Under the fixed-sales modes,social welfare is not affected by the firm decision makers’ risk-averse attitude or by the choice between direct and indirect sales modes.When the risk aversion degree of the sales firm or the cost efficiency of sales service investment is sufficiently high,social welfare is higher under the fixed-sales modes;otherwise,it is higher under the fixed-price modes.Finally,this dissertation studies a decentralized supply chain consisting of a risk-averse supplier and a risk-neutral retailer under realized delivery lead time uncertainty and government’s purchase subsidies.Research on subsidy policies has not considered uncertainty of delivery lead time,while this dissertation fills this gap.A game model is established to analyze the supply chain’s quoted lead time and pricing decisions.We further use the decision result under the centralized supply chain as a benchmark to examine the efficiency of the decentralized supply chain.We focus on the impacts of government subsidies and supplier’s risk aversion on the supply chain decision-making,supply chain efficiency and social welfare.Results show that as government’s subsidy increases,the supply chain will promise a longer lead time and increase prices,but the market demand and firms’ utilities will increase.Supplier’ risk aversion will reduce market demand and the firm decision makers’ utilities,but can improve the efficiency of the supply chain.