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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

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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  • Lozano, Javier & Blanco, Ester & Rey-Maquieira, Javier, 2010. "Can ecolabels survive in the long run?: The role of initial conditions," Ecological Economics, Elsevier, vol. 69(12), pages 2525-2534, October.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:12:p:2525-2534
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    Cited by:

    1. Vlaeminck, Pieter & Vranken, Liesbet, 2015. "Do labels capture consumers’ actual willingness to pay for Fair Trade characteristics?," Working Papers 206438, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    2. repec:ipg:wpaper:2014-496 is not listed on IDEAS
    3. repec:ipg:wpaper:2014-606 is not listed on IDEAS
    4. Sihem Dekhili & Mohamed Achabou, 2015. "The Influence of the Country-of-Origin Ecological Image on Ecolabelled Product Evaluation: An Experimental Approach to the Case of the European Ecolabel," Journal of Business Ethics, Springer, vol. 131(1), pages 89-106, September.
    5. Vlaeminck, Pieter & Jiang, Ting & Vranken, Liesbet, 2014. "Food labeling and eco-friendly consumption: Experimental evidence from a Belgian supermarket," Ecological Economics, Elsevier, vol. 108(C), pages 180-190.
    6. 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.
    7. Vlaeminck, Pieter & Jiang, Ting & Vranken, Liesbet, 2014. "Labelling and consumer behaviour: experimental evidence from a Belgian supermarket," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182742, European Association of Agricultural Economists.
    8. Sladana Pavlinovic, 2013. "Signalling Green Technology Through Price And Eco-Label," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 87-94, December.
    9. Esther Blanco & Javier Lozano, 2015. "Ecolabels, uncertified abatement, and the sustainability of natural resources: an evolutionary approach," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 623-647, July.
    10. 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.

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