Research on Stimulation Effect of Two Government’s Subsidy Modes on Enterprise and Consumer

Jian LIU, Chaobing LI

Abstract


Games models of manufacturer and retailer are established based on two modes of government’s subsidy to manufacturer and consumer, analyzing influence of subsidy modes on manufacturer and retailer’s decision and their performance, and comparing stimulated effects on demand. Results indicate that consumer’s expenses, demand, profit of enterprise under pattern of government’s subsidy to consumer are smaller than those under pattern of government’s subsidy to manufacturer. Respectively; when influence on demand by subsidy is smaller than influence on demand by price; consumer’s expense, demand, profit of enterprise under pattern of government’s subsidy to consumer are larger than those under pattern of government’s subsidy to manufacturer. Respectively, when influence on demand by subsidy is larger than influence on demand by price.

Key words: Government’s subsidy mode; Games models; Enterprise; Consumer


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