Research on Channel Structure and Government Subsidy Strategy of Competing Supply Chains under IPR System

Based on Individual Producer Responsibility (IPR) and government recycling subsidy policies, this paper studies a two-tier duopoly competing supply chains model consisting of two manufacturers and two exclusive retailers. Both manufacturers produce substitutable products and bear the product recycling cost with (dis-) economies of scale. Based on the IPR system, we first study the impact of product competition, the scale effect of recycling, and the government recycling subsidy policy on the vertical channel structure selection strategies and selection equilibrium of the competing supply chains. Subsequently, we reveal how to design government subsidy policy with symmetrical supply chain structure combinations in order to achieve maximal social welfare.