Research on Government Subsidy Mechanism of Green Products Based on Heterogeneous Customers

This paper builds a model of government subsidies to green products in the face of heterogeneous customers with different green perferences. There are two kinds of subsidy mechanism in this paper: One is subsidies given to green manufactures, and other is subsidies given to customers. The result shows that the two subsidies both benefit development of green technology. And government subsidies given to manufacture can bring greater social welfare than those to customers. In addition, as green customers increase, the optimal subsidies for manufacturers decline, and the optimal subsidies for consumers increase.