Pollution accumulation and abatement policy in a supply chain

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This paper seeks to determine how the double marginalization phenomenon affects the tradeoff between polluting emissions and abatement activities related to pollution accumulation in a supply chain composed of one manufacturer and one retailer. The environmental consequence of this inefficiency, which emerges in a non-cooperative vertical setting governed by a single-parameter contract, is overlooked in the literature on pollution control. In the setup of a two-stage game, we investigate the impact of double marginalization for non-cooperative equilibrium. To check whether there are differences between dynamic and strategic effects of double marginalization on pollution accumulation, both the open-loop and feedback Nash equilibria are derived over a finite time horizon, with the cooperative solution as a benchmark.
Publisher
ELSEVIER SCIENCE BV
Issue Date
2016-02
Language
English
Article Type
Article
Keywords

CONSUMER ENVIRONMENTAL AWARENESS; GAME APPROACH; MANUFACTURING PERFORMANCE; SOCIAL-RESPONSIBILITY; CHANNEL COORDINATION; DIFFERENTIAL GAME; WHOLESALE PRICE; COMPETITION; MANAGEMENT; IMPACT

Citation

EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, v.248, no.3, pp.982 - 996

ISSN
0377-2217
DOI
10.1016/j.ejor.2015.08.009
URI
http://hdl.handle.net/10203/207404
Appears in Collection
MT-Journal Papers(저널논문)
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