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Séminaire sur les jeux dynamiques et les applications

Strategic Pricing and Investment in Environmental Quality by an Incumbent Facing a Greenwasher Entrant


20 avr. 2023   11h00 — 12h00

Can Baris Cetin HEC Montréal, Canada

Can Baris Cetin

Présentation sur YouTube.

In this study, we analyze the effect of greenwashing on firms’ strategies and outcomes and consumers. We consider a two-stage game where a monopolist makes pricing and environmental quality investment in the first stage and competes with an entrant in the second stage. The incumbent is a green firm and does not overrate the environmental quality of its product, while the entrant may be tempted by greenwashing. We assume that only inexperienced consumers, that is, consumers who did not purchase the product in the first period, can be lured by greenwashing. Consequently, our model captures two important dynamic features, namely, the change in the competitive structure, and the presence of a “learning” effect in the market. We investigate the conditions that make greenwashing profitable for the entrant, how the incumbent responds to greenwashing, and the impact of greenwashing on the environment and customers.
Joint work with Arka Mukherjee and Georges Zaccour.

Georges Zaccour responsable
Ke Jiang responsable
Fatemeh Zand responsable


Montréal Québec

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