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Must Pollution Abatement Harm the Supplier in a Multi-Echelon Supply Chain?

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  • Saglam, Ismail

Abstract

This paper studies the welfare effects of the abatement cost burden of a supplier in a multi-echelon supply chain. We theoretically show that the profits of all echelons other than the supplier become lower when the supplier contributes more to the abatement. Also, we computationally show that the profit of the supplier may be higher when it makes a small amount of contribution to the abatement provided that the demand curve faced by the retailer is sufficiently linear.

Suggested Citation

  • Saglam, Ismail, 2023. "Must Pollution Abatement Harm the Supplier in a Multi-Echelon Supply Chain?," MPRA Paper 118834, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118834
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    References listed on IDEAS

    as
    1. Frota Neto, J. Quariguasi & Bloemhof-Ruwaard, J.M. & van Nunen, J.A.E.E. & van Heck, E., 2008. "Designing and evaluating sustainable logistics networks," International Journal of Production Economics, Elsevier, vol. 111(2), pages 195-208, February.
    2. Feimin Zhong & Jinxing Xie & Xiaobo Zhao & Zuo‐Jun Max Shen, 2016. "On efficiency of multistage channel with bargaining over wholesale prices," Naval Research Logistics (NRL), John Wiley & Sons, vol. 63(6), pages 449-459, September.
    3. Lan Wang & Gangshu (George) Cai & Andy A. Tsay & Asoo J. Vakharia, 2017. "Design of the Reverse Channel for Remanufacturing: Must Profit-Maximization Harm the Environment?," Production and Operations Management, Production and Operations Management Society, vol. 26(8), pages 1585-1603, August.
    4. Saglam, Ismail, 2023. "The Optimal Antitrust Policies for Vertical Price Restraints in a Non-Green Supply Chain," MPRA Paper 117587, University Library of Munich, Germany.
    5. Deyan Yang & Jinyong Wang & Dongping Song, 2019. "Channel Structure Strategies of Supply Chains with Varying Green Cost and Governmental Interventions," Sustainability, MDPI, vol. 12(1), pages 1-26, December.
    6. Das, Kanchan & Rao Posinasetti, Nageswara, 2015. "Addressing environmental concerns in closed loop supply chain design and planning," International Journal of Production Economics, Elsevier, vol. 163(C), pages 34-47.
    7. Wang, Qifei & Hong, Xianpei & Gong, Yeming (Yale) & Chen, Wanying (Amanda), 2020. "Collusion or Not: The optimal choice of competing retailers in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 225(C).
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    More about this item

    Keywords

    Supply chain; multi-echelon; abatement cost.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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