An evolutionary game analysis of subsidy strategies in the supply chain of SMEs based on system dynamics

In order to analyze the strategic choices of core enterprises subsidizing small and medium-sized enterprises (SMEs) to achieve pollution co-governance under government regulation, this paper constructs an evolutionary game model between core enterprises and SMEs and reveals the impact of SMEs pollution problems on various subjects under the rigid constraints of environmental protection. The strategy evolution process under the reward and punishment mechanism is analyzed, and the effect of the parameters such as the intensity of production restriction and the incentive on the evolution result is estimated based on the system dynamics model. Simulation results show that core companies are more sensitive to incentives in their strategic choices, and SMEs are more sensitive to punishment. Production restrictions have different effects on core companies and SMEs. Lower production restrictions cannot affect the strategic choices of core companies, but increase the burden on SMEs. Only if both the environmental incentives and production restriction strategies were executed well, the involvement of core enterprises in the pollution treatment would work efficiently. (C) 2021 The Authors. Published by Elsevier B.V.