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Can ecolabels survive in the long run?: The role of initial conditions

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  • Lozano, Javier
  • Blanco, Ester
  • Rey-Maquieira, Javier
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    Abstract

    This paper analyzes the interaction between three environmental strategies within a population of firms: brown, green, and certified green strategies. We first present a restricted version of an evolutionary game where only brown and green strategies are possible. Next, the model is extended to allow green firms to certify their environmental strategies by joining an ecolabel. Our analysis shows that when it survives, the ecolabel tends to fully replace other uncertified environmental initiatives and to increase the proportion of firms implementing voluntary abatement. Nevertheless, the long-run survival of the ecolabel is not a necessary outcome of the model, although it can be facilitated via policies that reduce abatement or certification costs, increase consumer's environmental concerns or improve the credibility of the certifier, whereas it may be reduced by green-wash news about the sector. An ecolabel's survival may also depend on how and when it is launched. In those common situations where the model has two stable equilibria, initial conditions play a key role in determining the ecolabel's survival. Specifically important determinants are the degree of adoption of voluntary abatement when the ecolabel is launched and the amount and composition of firms that participate in the creation of the ecolabel.

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    File URL: http://www.sciencedirect.com/science/article/B6VDY-50YP665-1/2/b276bcb878431a988cbb755aa916cd4b
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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2010)
    Issue (Month): 12 (October)
    Pages: 2525-2534

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    Handle: RePEc:eee:ecolec:v:69:y:2010:i:12:p:2525-2534

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    Web page: http://www.elsevier.com/locate/ecolecon

    Related research

    Keywords: Voluntary environmental contributions Ecolabeling Evolutionary game theory Replicator dynamics Sustainable management Transitional dynamics;

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    Cited by:
    1. Achabou, Mohamed Akli & Dekhili, Sihem, 2013. "Luxury and sustainable development: Is there a match?," Journal of Business Research, Elsevier, vol. 66(10), pages 1896-1903.
    2. Sihem Dekhili & Mohamed Akli Achabou, 2014. "How the 'made in' can influence the eco-equality assessment of a product: An experimental study on the case of the European Ecolabel," Working Papers 2014-140, Department of Research, Ipag Business School.

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