Pricing policies for green energy-saving product adoption and government subsidy

Driven by the goal of “carbon neutrality” for achieving energy savings and carbon reductions, various industries are striving to continuously introduce green energy-saving products. This study contributes to providing pricing policies and product launch strategies for the green energy-saving product manufacturers, aiming at increasing their profitability when facing strategic consumers. We develop a two-period pricing model, which considers three pricing policies and three product launch strategies in the presence of green information sharing, and we then investigate the performance of two types of government subsidy programs. The basic results show that the manufacturers would share information and adopt price commitment or price matching with dual rollover launch, when both the information sharing cost and consumer strategic level are low. While sharing green information is always beneficial to manufacturers its impact on sales quantity depends on consumer strategic level and technology preference. The further finding suggests that the highest profits can be achieved by adopting both price commitment and price matching, whereas the largest sales quantity can only be obtained under dynamic pricing. To achieve the promotion goal under price commitment, we derive the optimal subsidies of the manufacturer and consumers, and the results indicate that subsidizing consumers can not only help to reach the maximum promotion but also eliminate the risk of market failure. This study is expected to provide insights of subsidy programs for policy makers to enable manufacturers to achieve the promotion goal of energy-saving product, and it also accelerates the development of sustainable supply chain management.