Governments in many countries offer fiscal incentives—such as subsidies or tax breaks—to consumers to encourage the purchase of environmentally-friendly products like solar panels and electric vehicles. Early adoption by consumers facilitates manufacturers’ learning-by-doing and reduces production cost over time, although the cost reduction itself is subject to uncertainty. Governments face a challenge: should they commit to a multi-period subsidy path (commitment policy) or adjust the subsidy contingent on the realized production cost reduction (dynamic policy)? What are the implications for manufacturers and consumers? We consider a two-period monopoly setting to study these policies. Given the subsidy policy, the manufacturer sets its prices, whereas consumers strategically decide when to purchase the product, if at all. Naturally, the two policies result in different subsidy paths. We find that products with higher initial unit cost (implying higher prices) do not deserve higher subsidies. Our key result is that governments, who seek to maximize expected social welfare, should adopt the dynamic policy. Insightfully, the four components of social welfare—consumer surplus, manufacturer’s profit, environmental benefit and subsidy expenditure—may all be realized higher under the commitment policy than under the dynamic policy when the realized cost reduction falls short of its expected value. This is because the second-period effective price (price minus subsidy) is more sensitive to cost uncertainty under the dynamic policy. Nevertheless, the dominance of the dynamic policy persists also when considering the realized social welfare. We study several extensions demonstrating the robustness of our results, while highlighting certain exceptions.

中文翻译：

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政府的最佳跨期补贴和制造商在战略消费者面前的动态定价

许多国家/地区的政府向消费者提供财政激励措施，例如补贴或税收减免，以鼓励购买太阳能电池板和电动汽车等环保产品。消费者的早期采用有助于制造商边做边学，并随着时间的推移降低生产成本，尽管成本降低本身存在不确定性。政府面临一个挑战：他们应该承诺多期补贴路径（承诺政策）还是根据已实现的生产成本降低来调整补贴（动态政策）？这对制造商和消费者有什么影响？我们考虑一个两期垄断环境来研究这些政策。鉴于补贴政策，制造商设定价格，而消费者则战略性地决定何时购买产品（如果有的话）。自然，这两种政策导致了不同的补贴路径。我们发现，初始单位成本较高（意味着价格较高）的产品不值得获得更高的补贴。我们的主要结果是，寻求最大化预期社会福利的政府应该采用动态政策。有见地地，当已实现的成本降低低于其预期价值时，社会福利的四个组成部分——消费者剩余、制造商利润、环境效益和补贴支出——在承诺政策下的实现率都可能高于在动态政策下。这是因为在动态政策下，第二期有效价格（价格减去补贴）对成本不确定性更为敏感。然而，在考虑已实现的社会福利时，动态政策的主导地位仍然存在。我们研究了几个扩展，证明了我们结果的稳健性，同时强调了某些例外。