Investment in Abatement Capacity when Consumers Value the Environmental Performance of the Supply Chain

This seminar from the GERAD Research Center's series on dynamic games and applications explores abatement investment and pricing strategies in supply chains where environmental performance influences consumer decisions. Examine how a product's green reputation is determined by its pollution rate compared to declining industry standards. Learn about the manufacturer's role in managing abatement investment and how retailer cost-sharing creates Pareto-optimal outcomes while potentially increasing total emissions through higher demand. Discover why faster declines in industry standards lead to reduced abatement investment, and understand the challenges "brown firms" with lower initial green reputations face in catching up, contrasted with the virtuous cycle experienced by firms with higher initial environmental performance. Presented by Lijue Lu from NEOMA Business School, France, this 58-minute talk includes collaborative research with Elena Parilina and Georges Zaccour.