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- Publisher Website: 10.1287/msom.2017.0684
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Article: Improving consumer welfare and manufacturer profit via government subsidy programs: Subsidizing consumers or manufacturers?
Title | Improving consumer welfare and manufacturer profit via government subsidy programs: Subsidizing consumers or manufacturers? |
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Authors | |
Keywords | Economic development Developing economies Social welfare Government subsidies |
Issue Date | 2018 |
Citation | Manufacturing and Service Operations Management, 2018, v. 20, n. 4, p. 752-766 How to Cite? |
Abstract | © 2018 INFORMS. Most consumers in rural areas of many developing countries cannot a ord to purchase certain livelihood improvement products such as home appliances. To improve consumer welfare and manufacturer profit, many governments launch di erent types of subsidy programs that o er subsidies to consumers, manufacturers, or both. Motivated by a subsidy program developed by the Chinese government in 2007, we present a parsimonious model to determine the optimal subsidy program in di erent settings so as to gain a better understanding about the conditions under which it is optimal for the government to subsidize consumers only, manufacturers only, or both. Our analysis reveals that the structure of the optimal subsidy program depends on (a) whether there is a well-established market selling price for the products; and (b) the relative emphasis that the government places on consumer welfare versus manufacturer profit. Also, we find that governments can improve consumer welfare by developing subsidy programs that involve multiple (competing) manufacturers with di erent market sizes and adequate capacities. Our findings provide insights for developing e ective government subsidy programs. |
Persistent Identifier | http://hdl.handle.net/10722/296271 |
ISSN | 2023 Impact Factor: 4.8 2023 SCImago Journal Rankings: 5.466 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Yu, Jiayi Joey | - |
dc.contributor.author | Tang, Christopher S. | - |
dc.contributor.author | Shen, Zuo Jun Max | - |
dc.date.accessioned | 2021-02-11T04:53:12Z | - |
dc.date.available | 2021-02-11T04:53:12Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | Manufacturing and Service Operations Management, 2018, v. 20, n. 4, p. 752-766 | - |
dc.identifier.issn | 1523-4614 | - |
dc.identifier.uri | http://hdl.handle.net/10722/296271 | - |
dc.description.abstract | © 2018 INFORMS. Most consumers in rural areas of many developing countries cannot a ord to purchase certain livelihood improvement products such as home appliances. To improve consumer welfare and manufacturer profit, many governments launch di erent types of subsidy programs that o er subsidies to consumers, manufacturers, or both. Motivated by a subsidy program developed by the Chinese government in 2007, we present a parsimonious model to determine the optimal subsidy program in di erent settings so as to gain a better understanding about the conditions under which it is optimal for the government to subsidize consumers only, manufacturers only, or both. Our analysis reveals that the structure of the optimal subsidy program depends on (a) whether there is a well-established market selling price for the products; and (b) the relative emphasis that the government places on consumer welfare versus manufacturer profit. Also, we find that governments can improve consumer welfare by developing subsidy programs that involve multiple (competing) manufacturers with di erent market sizes and adequate capacities. Our findings provide insights for developing e ective government subsidy programs. | - |
dc.language | eng | - |
dc.relation.ispartof | Manufacturing and Service Operations Management | - |
dc.subject | Economic development | - |
dc.subject | Developing economies | - |
dc.subject | Social welfare | - |
dc.subject | Government subsidies | - |
dc.title | Improving consumer welfare and manufacturer profit via government subsidy programs: Subsidizing consumers or manufacturers? | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1287/msom.2017.0684 | - |
dc.identifier.scopus | eid_2-s2.0-85052737756 | - |
dc.identifier.volume | 20 | - |
dc.identifier.issue | 4 | - |
dc.identifier.spage | 752 | - |
dc.identifier.epage | 766 | - |
dc.identifier.eissn | 1526-5498 | - |
dc.identifier.isi | WOS:000442665500010 | - |
dc.identifier.issnl | 1523-4614 | - |