Optimal government and manufacturer incentive contracts for green production with asymmetric information.

ABSTRACT: Governments commonly utilize subsidy policy to incentivize manufacturers to produce green products, promoting sustainable development. However, in the presence of information asymmetry, some manufacturers may dishonestly misrepresent the green degree of their products to secure higher subsidies. This study examines different incentive contracts between the government and a green product manufacturer who keeps private information of a product's green-degree in a principal-agent model. Lump-sum transfer and fixed- and flexible-proportion benefit-sharing contracts are proposed to investigate screening and improving green-degree issues. To further enhance the flexible-proportion benefit-sharing contract, we construct a non-linear coordinated contract based on the Nash bargaining solution. The

SUBMITTER: Xu J 

PROVIDER: S-EPMC10411796 | biostudies-literature | 2023

REPOSITORIES: biostudies-literature