1. Pollution accumulation and abatement policies in two supply chains under vertical and horizontal competition and strategy types
- Author
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Jeongeun Sim, Fouad El Ouardighi, Bowon Kim, ESSEC Business School, Essec Business School, KwangWoon University, Department of Electrical Engineering [Korea Advanced Institute of Science and Technology] (KAIST), and Korea Advanced Institute of Science and Technology (KAIST)
- Subjects
Pollution ,021103 operations research ,Information Systems and Management ,Horizontal and vertical ,Strategy and Management ,Supply chain ,media_common.quotation_subject ,05 social sciences ,0211 other engineering and technologies ,02 engineering and technology ,Management Science and Operations Research ,Competition (economics) ,Market structure ,Order (exchange) ,0502 economics and business ,[INFO]Computer Science [cs] ,Business ,Finite time ,050203 business & management ,Industrial organization ,media_common - Abstract
This research investigates the impact of both horizontal and vertical competition, on the one hand, and strategy types (commitment-based versus contingent-based equilibrium strategies), on the other hand, on the pollution accumulated by two supply chains over time. We consider a two-stage game model where two manufacturers and two retailers are involved in a wholesale price contract, in order to supply the demand over a finite time horizon. In the first stage of the game, the manufacturers set their respective optimal transfer prices. During the second stage, polluting emissions are created over time in proportion with demand, which is controlled by the retailers’ respective consumer prices. In this stage, the manufacturers are involved in emissions abatement. In this setup, we seek to identify the combination of market structure and strategy type that leads the two supply chains to generate the lowest pollution intensity and the highest level of abatement intensity.
- Published
- 2021
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