Purpose

Without proper treatment, waste cooking oil (WCO) will bring serious environmental and health hazards, which can be effectively alleviated by converting it into biofuel. Subsidies from the government usually play a significant role in encouraging recycling activities and supporting sustainable supply chain. This paper aims to quantitatively investigate the incentive effects of government subsidies under asymmetric information.

Design/methodology/approach

This paper applies the principal–agent contract to compare the incentive effects of the two widely used subsidy modes (raw material price subsidy [MS] and finished product sale subsidy [FS]) in a management system which consists of the government and a bio-firm where the bio-firm’s conversion rate of the WCO remains as private information.

Findings

Results indicate that the two subsidy modes have the same performance under symmetric information, while under asymmetric information, the government always prefers the MS mode which is more environment-friendly. Besides, if the average conversion rate is large or the uncertainty level of the asymmetric information is moderate, the MS mode is Pareto-improving compared with the FS mode for the government and the high-type bio-firm. Only when the average conversion rate is small or the uncertainty level is very small/very large, the high-type bio-firm welcomes the FS mode.

Originality/value

Different from the existing literature, this paper applies the principal–agent contract into the WCO management system and quantitatively compares the two subsidy modes taking the practical problem of asymmetric information into consideration.

中文翻译：

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考虑信息不对称的政府对废食用油的补贴的含义

目的

如果没有适当的处理，废弃的食用油（WCO）会带来严重的环境和健康危害，可以通过将其转化为生物燃料来有效缓解。政府的补贴通常在鼓励回收活动和支持可持续供应链中发挥重要作用。本文旨在定量研究信息不对称下政府补贴的激励效果。

设计/方法/方法

本文运用委托-代理合同，在由政府和生物制药组成的管理体系中，比较了两种广泛使用的补贴模式（原材料价格补贴[MS]和制成品销售补贴[FS]）的激励效果。 WCO的生物公司的转换率仍作为私人信息的公司。

发现

结果表明，两种补贴模式在信息对称的情况下表现相同，而在信息不对称的情况下，政府始终偏向于环境友好的MS模式。此外，如果平均转换率高或不对称信息的不确定性水平适中，则与政府和高级生物企业的FS模式相比，MS模式是帕累托改进。只有当平均转换率很小或不确定性级别非常小/非常大时，高级生物公司才会采用FS模式。

创意/价值

与现有文献不同，本文将委托代理合同应用于WCO管理体系，并考虑了信息不对称的实际问题，对两种补贴方式进行了定量比较。