This paper studies the emission reduction R&D in a two-level supply chain under two technology policies: R&D subsidization and R&D cooperation, and compares the performance of the two technology policies. By means of game theory, we derive the equilibrium decisions and then compare optimal decisions, profits and social welf are under the two policies with exogenous tax. Our results indicate that production quantity and emissions under R&D subsidization policy are lower than those under R&D cooperation policy, while the effort of the R&D subsidization policy is higher than that of the R&D cooperation policy. In addition, we identify the conditions when the R&D subsidization policy performs better than the R&D cooperation policy, and find that the comparison results that supply chain profits and social welf are depend on the level of emissions tax, the efficiency of R&D technology and the steepness of marginal environmental damage function. In most cases, R&D cooperation policy leads to higher social welf are compared with R&D subsidization policy.
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