The effect of greenness- and price-based competition on a product's environmental performance

This study considers two retailers that offer substitutable products and compete in a greenness- price-sensitive market. The rely on supply chains have different costs, replenishment times carbon intensities. demand is stochastic, the inventory time also stochastic. Each retailer decides greenness of its product (carbon intensity), price order size to maximize expected profit under service level constraint. mean for each decreases intensity increases other retailer's intensity. customers' switchovers are, thus, governed by disparities price. may market powers since total not necessarily equally shared between them when they same level. We derive analytically best response decisions at Nash equilibrium. determine conditions lead competing offering greener or dirtier than it would offered monopolistic situation. explain how power impacts strategy conditions. investigate insights into impact transportation emissions, decisions, retailers' optimal competition scenarios.