The Impact of Government Subsidies on the Low Carbon Products Selection under Demand Fluctuation

doi:10.3969/j.issn.1007-7375.e17-1047

Abstract

Abstract: The impact of government subsidies on the low carbon products selection under demand fluctuation is studied. Based on Cournot game models with two cases which are monopoly and duopoly, the impact of different production strategies on the output and profit of manufacturers is analyzed, and the conditions that meet the production equilibrium strategy are then proposed. The results show that production strategy is affected by government subsidies, spilling over rate and market preference. Furthermore, government subsidies can motivate the manufacturer to produce low carbon products, and competition will undermine the incentive effect of government subsidies to the production of low carbon products. However, large government subsidies will increase carbon emissions. In addition, the greater the degree of market fluctuation is, the smaller the incentive effect of government subsidies is.

Key words: low carbon products, demand fluctuation, government subsidies, production strategy

CLC Number:

F273

NIE Jiajia, LI Weichen. The Impact of Government Subsidies on the Low Carbon Products Selection under Demand Fluctuation[J]. Industrial Engineering Journal , 2018, 21(1): 22-29.

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