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Combating greenwashers in emerging markets: A game-theoretical exploration of firms, customers and government regulations

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  • Huang, Hongfu
  • Xing, Xinjie
  • He, Yong
  • Gu, Xiaoyu

Abstract

The sustainability boom in developing countries has caused the emergence of greenwashing behaviors that are impeding sustainable progress in the third world. To combat greenwashing behaviors in emerging markets, this paper proposes a game-theory model that studies the competitive pricing strategies of green incumbents facing competition from greenwashing entrants in emerging markets. The research considers customer behaviors, greenwashing threats, and the different implications of anti-greenwashing government enforcement strategies. The results reveal that greenwashing acts are not always performed with negative intent, but benefit both green incumbents and total customer surplus if the market greenness gap is small. In addition, a loose enforcement level contributes to higher social welfare in emerging markets.

Suggested Citation

  • Huang, Hongfu & Xing, Xinjie & He, Yong & Gu, Xiaoyu, 2020. "Combating greenwashers in emerging markets: A game-theoretical exploration of firms, customers and government regulations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:transe:v:140:y:2020:i:c:s136655452030627x
    DOI: 10.1016/j.tre.2020.101976
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    3. Liu, Changyu & Song, Yadong & Wang, Wei & Shi, Xunpeng, 2023. "The governance of manufacturers’ greenwashing behaviors: A tripartite evolutionary game analysis of electric vehicles," Applied Energy, Elsevier, vol. 333(C).
    4. Renata Dana Nițu-Antonie & Emőke-Szidónia Feder & Vladimir Nițu-Antonie & Róbert-Károly György, 2023. "Predicting Sustainable Entrepreneurial Intentions among Romanian Students: A Mediated and Moderated Application of the Entrepreneurial Event Model," Sustainability, MDPI, vol. 15(6), pages 1-22, March.
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    6. Chen, Qi & Duan, Yongrui, 2023. "Impact of information disclosure on global supply chain greenwashing: Is more information transparency always better?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 178(C).
    7. Zhang, Wei & Qin, Chu & Zhang, Wenyao, 2023. "Top management team characteristics, technological innovation and firm's greenwashing: Evidence from China's heavy-polluting industries," Technological Forecasting and Social Change, Elsevier, vol. 191(C).

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