Abstract
This study considers two types of consumers: those without preference difference, and those that prefer organic agricultural products. It constructs two two-stage hoteling behavior-based pricing models and solves for the optimal loyalty price and poaching price of the two types of enterprises. It analyzes the influence of subsidies on the pricing of the two types of products and corporate profits. The study also undertakes numerical simulation for further analysis, finding that green subsidies are negatively correlated with the loyalty price and poaching price of organic agricultural products, but that they will not affect the difference between the two types of prices. When the inherited market of organic agricultural products is dominant, the size of green subsidy affects the relationship between the prices of the two types of products. However, when organic agricultural products do not dominate the initial market, green subsidies do not affect the size of the relationship between the two prices of the two types of products. When the initial market position of organic agricultural products is different, the types of competing customers are different between the two types of enterprises, and the intensity of competition will increase with the increase of subsidies. Green subsidies increase the profits of organic agricultural enterprises and reduce the profits of conventional agricultural enterprises.
Highlights
To promote sustainable agricultural development, organic agricultural products are encouraged to limit the use of artificial fertilizers and pesticides in the production process
At Sam’s in January 2019, for its own-brand northeast grain fragrant rice, the price for loyal customers was 6.98 CNY/kg, and the price for new customers was about 6.28 CNY/kg; the yudaofu-branded ecological rice on sale was priced at 10.9 CNY/kg for loyal customers and 9.81 CNY/kg for new customers
That is, when the inherited market of organic agricultural products is inferior, green subsidies given by the government must be changed within the scope of [C −
Summary
To promote sustainable agricultural development, organic agricultural products are encouraged to limit the use of artificial fertilizers and pesticides in the production process. Green agricultural subsidies can reduce the production costs of organic agricultural products, enhancing their competitiveness with conventional agricultural products in the market, and promoting the healthy development of organic agriculture. When organic and conventional products are sold competitively in the market, especially online, more and more enterprises adopt behavior-based pricing strategies for new and existing customers. When considering two types of consumers with different preferences for organic agricultural products in the market, this study takes into account the pricing decisions of enterprises producing organic agricultural products with green agricultural subsidies, and those producing conventional agricultural products. We will analyze the impact of green agricultural subsidies on the pricing and profits of both organic agricultural product enterprises and conventional agricultural product enterprises, to provide a decision-making reference for pricing in agricultural product enterprises, and further improve the green agricultural subsidies policy
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