Optimal digitalization and pricing decisions in a dual-channel agri-food supply chain under subsidy mechanisms: a decision analytic framework

Introduction Digital traceability is essential to ensure the transparency of the agricultural supply chain. However, manufacturers face a key strategic dilemma: the high initial investment cost hinders the investment in traceability, and multi-channel pricing further increases the complexity of strategic choice. Although subsidies are widely used to encourage technology adoption, their design whether offsetting initial investment or rewarding verifiable output will produce different economic signals, making the optimal policy and operational decisions unclear. Method To solve this dilemma, this study constructs a decision analysis framework based on Stackelberg game model. The framework jointly optimizes the level of digital traceability and pricing decisions of online and offline multi-channel under three policy mechanisms: (1) no subsidy; (2) Investment cost subsidy; (3) Production based subsidies. Through equilibrium analysis, the economic and operational results under different mechanisms are compared. Result Equilibrium analysis reveals a core policy trade-off: investment cost subsidies can accelerate the adoption of digital technology faster, but will raise wholesale prices and consumer prices; In contrast, output based subsidies can reduce prices, stimulate demand and improve the profits of the entire supply chain, although its direct incentive effect on investment in the early stage is weak. Discussion These findings provide feasible insights for policy makers and supply chain managers. They illustrate how subsidy design directly affects the strategic trade-off between “accelerating technology deployment” and “maximizing long-term economic benefits”. This study contributes to the literature in the field of technology adoption decision support, and provides a structured analysis tool for designing targeted incentives in a digitally coordinated supply chain.