Improving the greenness of enterprise supply chains by designing government subsidy mechanisms: based on prospect theory and evolutionary games

Li Hou; Yiming Zhang; Chunlin Wu; Jinbo Song

doi:10.3389/fpsyg.2023.1283794

Improving the greenness of enterprise supply chains by designing government subsidy mechanisms: based on prospect theory and evolutionary games

Front Psychol. 2023 Oct 23:14:1283794. doi: 10.3389/fpsyg.2023.1283794. eCollection 2023.

Authors

Li Hou^{1

2}, Yiming Zhang¹, Chunlin Wu^{3

4}, Jinbo Song²

Affiliations

¹ School of Economics and Management, Ningbo University of Technology, Ningbo, China.
² School of Economics and Management, Dalian University of Technology, Dalian, China.
³ School of Economics and Management, Beihang University, Beijing, China.
⁴ Beijing Key Laboratory of Emergency Support Simulation Technologies for City Operations, Beihang University, Beijing, China.

Abstract

Fostering sustainable development through green supply chains is of paramount significance. Government subsidies emerge as a successful strategy for motivating businesses to actively participate in such eco-friendly practices. This study employs prospect theory and an evolutionary game model to analyze the transition toward carbon peaking and neutrality while promoting the expansion of highly sustainable businesses. By exploring the decision-making processes of businesses and governments regarding sustainability, we develop an evolutionary game-based decision model to assess the impact of government subsidies on businesses engaged in green supply chains. Through numerical simulation obtained via MATLAB, we examine various factors influencing the evolution of the game system between green supply chain businesses and the government. Additionally, we investigate how government incentives impact the decision-making behavior of green supply chain businesses. Our findings indicate that governmental fines can effectively encourage the adoption of green supply chains. Furthermore, moderate government subsidies incentivize enterprises to opt for sustainable supply chains, benefiting both the government and businesses. However, providing hefty government subsidies not only fails to encourage the adoption of green supply chains but also incurs costs for the government, without yielding any positive change in the businesses' approach. By incorporating evolutionary game theory and prospect theory, this study contributes to the body of knowledge on government-supported green supply chains, offering incentive programs tailored to the real-world conditions faced by businesses while demonstrating practical application values.

Keywords: evolutionary game; government subsidies; green supply chain; prospect theory; reward and punishment mechanisms.

Grants and funding

The author(s) declare financial support was received for the research, authorship, and/or publication of this article. This article was funded by grants from the National Natural Science Foundation of China (grant numbers 72171014 and 71801007) and Fundamental Research Funds for the Central Universities (grant number YWF-23-JT-103) to the corresponding author.