Dynamic Models of the Firm with Green Energy and Goodwill with a Constant Size of the Output Market

Green Veblen effect: Sustainability in pollution management

“…Closely related to this work, the optimization of pollution abatement efforts made by firms, such as investments in green technology or greener production processes, is well-studied in the literature (Yi et al, 2021). Modeling environmentally conscious consumers and the associated goodwill, Dawid et al (2020) study investment in green energy and De Giovanni (2014) focuses on green advertising. Similarly, the modeling of environmentally conscious consumers with investment in environmentally-friendly operations is proposed by Saha et al (2017) for additional investment in preservation technology, by Dai and Zhang (2017) with differentiated prices, and by Zhang et al (2017) and Liu and De Giovanni (2019) within a supply-chain context.…”

“…This paper models green consumers on a continuum along which consumers have different levels of greenness. As consumers become greener, their willingness to pay for greener products increases (Binder and Blankenberg, 2017;Dawid et al, 2020;Griskevicius et al, 2010;Lisberg Jensen and Elahi, 2017;Sexton and Sexton, 2014;Yao et al, 2022). Similar to Kort et al (2006) and Chenavaz and Jasimuddin (2017), recall in the model, the price is determined by an inverse demand function.…”

“…By assumption, a greener production process pleases green consumers, since a greener process pollutes less (Bi et al, 2017;Dawid et al, 2020;Krass et al, 2013;Nouira et al, 2014). Thus, green consumers incentivize firms to invest in greener production processes (Dawid et al, 2020;De Giovanni, 2014;Saha et al, 2017).…”

Retailer-driven carbon emission reduction: contract design in the presence of information asymmetry and cap-and-trade

“…With the low-carbon-oriented market in terms of government and consumers, brand-name retailers have begun to incorporate carbon emission reduction into business operations, which contribute to increase economic benefits, achieve sustainable development, and enhance brand reputation (Ma et al 2017 ; Dawid et al 2020 ). For example, Apple commits to become carbon-neutral for the entire product footprint by 2030 (Apple 2021 ).…”