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Pollution accumulation and abatement policy in a supply chain

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  • Ouardighi, Fouad El
  • Sim, Jeong Eun
  • Kim, Bowon

Abstract

This paper seeks to determine how the double marginalization phenomenon affects the tradeoff between polluting emissions and abatement activities related to pollution accumulation in a supply chain composed of one manufacturer and one retailer. The environmental consequence of this inefficiency, which emerges in a non-cooperative vertical setting governed by a single-parameter contract, is overlooked in the literature on pollution control. In the setup of a two-stage game, we investigate the impact of double marginalization for non-cooperative equilibrium. To check whether there are differences between dynamic and strategic effects of double marginalization on pollution accumulation, both the open-loop and feedback Nash equilibria are derived over a finite time horizon, with the cooperative solution as a benchmark.

Suggested Citation

  • Ouardighi, Fouad El & Sim, Jeong Eun & Kim, Bowon, 2016. "Pollution accumulation and abatement policy in a supply chain," European Journal of Operational Research, Elsevier, vol. 248(3), pages 982-996.
  • Handle: RePEc:eee:ejores:v:248:y:2016:i:3:p:982-996
    DOI: 10.1016/j.ejor.2015.08.009
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    References listed on IDEAS

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    Cited by:

    1. repec:gam:jsusta:v:8:y:2016:i:4:p:365:d:68273 is not listed on IDEAS
    2. Benchekroun, Hassan & Martín-Herrán, Guiomar, 2016. "The impact of foresight in a transboundary pollution game," European Journal of Operational Research, Elsevier, vol. 251(1), pages 300-309.
    3. repec:eee:jomega:v:78:y:2018:i:c:p:179-191 is not listed on IDEAS
    4. Yenipazarli, Arda, 2017. "To collaborate or not to collaborate: Prompting upstream eco-efficient innovation in a supply chain," European Journal of Operational Research, Elsevier, vol. 260(2), pages 571-587.
    5. Dai, Rui & Zhang, Jianxiong, 2017. "Green process innovation and differentiated pricing strategies with environmental concerns of South-North markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 98(C), pages 132-150.
    6. repec:eee:transe:v:105:y:2017:i:c:p:60-82 is not listed on IDEAS
    7. Bowon Kim & Jeong Eun Sim, 2016. "Supply Chain Coordination and Consumer Awareness for Pollution Reduction," Sustainability, MDPI, Open Access Journal, vol. 8(4), pages 1-20, April.
    8. repec:eee:ejores:v:266:y:2018:i:3:p:934-949 is not listed on IDEAS

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