Research on digital transformation strategy and subsidy mechanism of manufacturing supply chain based on differential game

In the current research on the impact of the government on the digital transformation of enterprises, scholars have neglected the synergies of the supply chain and the mechanisms for regulating and assessing the subsequent behaviour of enterprises. Therefore, this paper uses differential games to study the optimal strategy of cost sharing in manufacturing supply chains during the digital transformation of upstream and downstream firms with government subsidies. The equilibrium game strategy is used with the government and parts of the supply chain as players under different models of cooperation, independent operation and government awards and punishments. For each model, the equilibrium results are solved, compared and simulated. The results show that the government reward and punishment mechanism can effectively suppress the "double marginal effect" and improve digitalization and benefits of enterprises. Meanwhile, the benefit level of enterprises under the government reward and punishment mechanism is related to the target digitalization level and the strength of the reward and punishment. When the target digitization level is relatively low at the early stage of digital transformation, the government reward and punishment mechanism is more likely to promote the level of benefits of enterprises. When the target digitalization level is relatively high in the middle and late stages of digital transformation, the government needs to reasonably set the strength of the reward and punishment in order to effectively promote digitalization and economic development.