Stackelberg game analysis of government subsidy policy in green product market

With the development of the digital economy, digital technology can help enterprises achieve digital, intelligent, and green transformation. However, the cost of enterprise transformation is high, and government subsidies can help reduce enterprise risks. In this study, based on the Stackelberg game model, a three-stage game model was established for government, manufacturer, and retail. Through theoretical proof and numerical simulation, the effects of cost subsidies, research and development subsidies, and sales subsidies policies were analyzed. The research shows that these three subsidy methods can promote the greening of products, increase market sales, and increase the profits of manufacturers and retailers, and the effect of R&D subsidies is more obvious. Excessive R&D subsidies will cause the social welfare function to decline. As consumers’ green preferences increase, the profits and social welfare of manufacturers and retailers also increase. Consumers’ green preferences can effectively improve the green level of products, increase product sales, and promote the development of green products. Under the optimal subsidy strategy, cost and sales subsidies are superior to R&D subsidies. By studying the effects of different subsidy policies, this study provides reasonable policies and suggestions for the government and the manufacturing industry.