Government subsidies, cooperation between land and sea enterprises and profit maximization --Data simulation based differential game study

Government subsidies are a crucial tool for encouraging cooperation between land and sea enterprises, but it is unclear how to quantitatively distribute these subsidies to ensure the best possible level of cooperation and profit maximization for both. The Nash non-cooperative game, master-slave game, and cooperative game are the three different cooperation modes that are used in the differential game model of government subsidies, which is built using the dynamic framework theory. Simulations are run using the data from two different enterprises, and it is discovered that:(1) Prior to government subsidies, the cooperation efforts and profits of land and sea businesses are at their highest levels under the cooperative game, whereas the profit goal of marine businesses is at its highest level under the master-slave game. (2) After government subsidies, the cooperative efforts of all three cooperative modes are the same, the target profit of land enterprises is maximized by the Nash non-cooperative game, and the target profit of sea businesses is maximized by the master-slave game. The three parties—the sea, the land, and the government—have different demands for the cooperative efforts. (3) Although government cost subsidies can boost the profit maximization of sea and land enterprises, the competitiveness of sea and land enterprises is instead reduced due to the rise in environmental costs, and the financial burden of the government continues to rise, which is not conducive to social development. Thus, it is important to take into account all three parties—the sea, the land, and the government—and it is crucial that government cost subsidies use their subsidy strategy in a way that is reasonable given the circumstances. Government subsidies that boost overall revenue may also influence future subsidy policies.