Research on Government Subsidy Strategies for the Development of Agricultural Products E-Commerce

Abstract

In many countries, the governments support the development of local agriculture through subsidization. Subsidizing the sales of agricultural products through E-commerce channels is a way to support the development of agriculture in China. This study aims to develop a profit model and apply Stackelberg game theory to determine which type of subsidies and decision-making can provide the maximum benefits for agricultural products E-commerce supply chains. The results indicate that for both centralized decisions and decentralized decisions, the subsidizing to the agricultural cooperative is better than the subsidizing to consumers and no subsidization. The sales volume, preservation level, sales efforts, and overall profit of the agricultural products E-commerce supply chain are significantly higher. It suggests that the government should play a leading role to support the development of agricultural products E-commerce. This study contributes to agricultural research by developing a profit model to examine the effects of different government subsidy strategies on each member of the agricultural online shopping supply chain. Recommendations are provided for agricultural cooperatives, E-commerce platforms, and the government to improve the quality and sales of agricultural products through online shopping channels.

Keywords

• Stackelberg game
• government subsidies
• agricultural products supply chain
• sales efforts