Study on incentive model of emergency equipment reservation system considering government's subsidy

The foundation of the enterprises' safety production and management is relatively weak in our country at present. The total quantity of sudden accidents remains high. Major and extraordinarily serious accidents still occur from time to time. In order to reduce social harm caused by sudden accidents, our governments specifically state that the productive and operational firms should reserve a certain number of emergency equipment. In fact, the goals the governments and the enterprises pursue are generally inconsistent, and the information the governments and the enterprises get is often asymmetric. The enterprises may pay less for pursuing its economic benefit, so the total effort will decline, which brings potential risk to equipment supply when an unexpected accident occurs. In view of this, this paper considered emergency equipment reservation system as a supply chain with one government and one enterprise, and analyzed the interest game between two sides. The incentive model of emergency equipment reservation system is constructed under the asymmetrical information. According to the constraint condition of government's subsidy, the government's optimal reward-punishment coefficient, the enterprise's optimal effort level, and their profits were attained. We compared the model's results under two different conditions. Furthermore, a numerical example and sensitivity analysis are used to verify the effectiveness of the proposed model, and we discussed the influence of several important exogenous variables on the optimal decision strategies of the enterprise and the government and their benefits. Finally, some practical management implications were put forward.