As public concerns on sustainable economic development increase, a rising number of traditional original equipment manufacturers (OEMs) have launched production lines on the environmentally preferable alternatives (green products). In this study, an oligopoly game theory model was formulated to analyse the competition between the green and ordinary manufacturing production sectors within the hybrid sustainable manufacturing industry. The author wants to address the questions whether and how the green production lines can survive in the market competitions. The author also investigates the market indices and total social welfare in the presence of tax and subsidy policy intervention. The results not only provide guidelines for OEMs to understand underlying factors that determine the competitiveness of green products in the market but also benefit policy makers by quantitatively showing the effectiveness of tax and subsidy policies in promoting green products.
Keywords: social welfare, hybrid manufacturing industry, game theory, oligopoly model, market competition, sustainable manufacturing, sustainable development, green manufacturing, original equipment manufacturers, OEMs, tax policies, subsidy policies, green products, product development