Abstract:

There are two typical subsidy policies adopted currently by government to encourage poverty alleviation through e-commerce——subsidy based on purchase volume and subsidy based on purchase price. An agricultural supply chain model composed of government， e-commerce and farmer is developed， a game model between three parties is established， with a risk-averse farmer and government subject to subsidy budget constraint. The mechanism where different subsidy policy affects three parties’ decision-making behaviors is analyzed， and finally the basis for the government under different subsidy budget constraint to choose a reasonable subsidy policy is put forward. It is found that （1） the e-commerce and the government have different preference for different subsidy policy； （2） the e-commerce always prefers the government to provide subsidy based on purchase volume. When the subsidy budget is relatively limited， the government prefers to choose the policy of subsidizing based on purchase price； when the subsidy budget is relatively sufficient， the government can choose either of the subsidy policies； （3） as farmer’s aversion to yield risk increases， the government will become more inclined to choose policy of subsidy based on purchase price. This shows that the government should pay attention to the difference in the degree of risk aversion of farmers when making subsidy policy. For example， young professional farmers are lower risk-averse， while old farmers whose scale are small are higher risk-averse. The study not only complement the literature on government subsidy for poverty alleviation through e-commerce but also provide decision-making reference for the government under different subsidy budget constraint to rationally choose subsidy policy to encourage poverty alleviation through e-commerce.

Key words: agricultural supply chain, poverty alleviation through e-commerce, subsidy policy, budget constraint, risk-averse