An oligopoly model to analyze the market and social welfare for green manufacturing industry

JOURNAL OF CLEANER PRODUCTION

卷:85

Article

Hu, Guiping¹  Wang, Lizhi¹  Chen, Yihsu²  Bidanda, Bopaya³ 

[1] Iowa State Univ, Dept Ind & Mfg Syst Engn, Ames, IA 50011 USA

[2] Univ Calif Merced, Sch Engn, Sierra Nevada Res Inst, Merced, CA USA

[3] Univ Pittsburgh, Dept Ind Engn, Pittsburgh, PA 15260 USA

关键词: Game theory;    Oligopoly model;    Market competition;    Tax and subsidy;    Social welfare;    Sustainable manufacturing;   

DOI  :  10.1016/j.jclepro.2014.01.016

来源: Elsevier

【 摘 要 】

As public concerns on sustainable economic development increase, an increasing number of manufactured products have found their environmentally preferable alternatives. In this study, we propose an oligopoly game theoretical model to analyze the competition between the green and ordinary manufacturing sectors. We identify cost efficiency and innovative design as key elements to the survival of green products. We also find that the effectiveness of Pigouvian tax and subsidy policies depend on product characteristics, market structures, as well as targeted results. Our small empirical examples on Corolla vs. Prius and Incandescent lamp vs. Compact fluorescent lamp (CFL) show that our modeling results are more optimistic than real market statistics. We identify pre-equilibrium market dynamics, consumer bias towards green products, and modeling limitations as the main reasons for such differences. We also investigate the market competition and total societal welfare in the presence of tax and subsidy policy intervention. The study results not only provide guidelines and managerial insights for green producers to understand the underlying factors that determine the competitiveness of green products in the market but also benefit policy makers by quantitatively showing the effectiveness of tax and subsidy policies in promoting green products. (C) 2014 Elsevier Ltd. All rights reserved.

【 授权许可】

Free