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Environmental-Regulation Pricing Strategies for Green Supply Chain Management

  • Chen, Yenming
  • Sheu, Jiuh-Biing

This paper demonstrates that a proper design of environmental-regulation pricing strategies is able to promote Extended Product Responsibility for green supply chain firms in a competitive market. A differential game model comprising Vidale-Wolfe equation has been established in light of sales competition and recycling dynamics as well as regulation related profit function. Analytic solutions of Markovian Nash equilibriums are provided with the necessary condition derived from Hamilton-Jacobi-Bellman equations. We found that governments should opt to gradually raise regulation standards so that rational manufacturers will gradually improve its product recyclability, and, in turn, Extended Product Responsibility will get promoted.

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File URL: http://mpra.ub.uni-muenchen.de/25255/1/MPRA_paper_25255.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25255.

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Date of creation: 01 Jun 2007
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Publication status: Published in Transportation Research Part E: Logistics and Transportation Review 5.45(2009): pp. 667-677
Handle: RePEc:pra:mprapa:25255
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  1. repec:cup:cbooks:9780521637329 is not listed on IDEAS
  2. Palmer, Karen & Walls, Margaret, 1999. "Extended Product Responsibility: An Economic Assessment of Alternative Policies," Discussion Papers dp-99-12, Resources For the Future.
  3. Vogelsang, Ingo, 2002. "Incentive Regulation and Competition in Public Utility Markets: A 20-Year Perspective," Journal of Regulatory Economics, Springer, vol. 22(1), pages 5-27, July.
  4. Foulon, Jerome & Lanoie, Paul & Laplante, Benoit, 2002. "Incentives for Pollution Control: Regulation or Information?," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 169-187, July.
  5. Don Fullerton & Wenbo Wu, 1996. "Policies for Green Design," NBER Working Papers 5594, National Bureau of Economic Research, Inc.
  6. Palmer, Karen & Walls, Margaret, 1997. "Optimal policies for solid waste disposal Taxes, subsidies, and standards," Journal of Public Economics, Elsevier, vol. 65(2), pages 193-205, August.
  7. Kriwet, A. & Zussman, E. & Seliger, G., 1995. "Systematic integration of design-for-recycling into product design," International Journal of Production Economics, Elsevier, vol. 38(1), pages 15-22, March.
  8. Ekins, Paul, 1999. "European environmental taxes and charges: recent experience, issues and trends," Ecological Economics, Elsevier, vol. 31(1), pages 39-62, October.
  9. Stavins, Robert, 2001. "Experience with Market-Based Environmental Policy Instruments," Discussion Papers dp-01-58, Resources For the Future.
  10. Chongwoo Choe & Iain Fraser, 2001. "On the Flexibility of Optimal Policies for Green Design," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(4), pages 367-371, April.
  11. Mukhopadhyay, Samar K. & Setaputra, Robert, 2007. "A dynamic model for optimal design quality and return policies," European Journal of Operational Research, Elsevier, vol. 180(3), pages 1144-1154, August.
  12. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
  13. Walls, Margaret, 2003. "The Role of Economics in Extended Producer Responsibility: Making Policy Choices and Setting Policy Goals," Discussion Papers dp-03-11, Resources For the Future.
  14. Sheu, Jiuh-Biing & Chou, Yi-Hwa & Hu, Chun-Chia, 2005. "An integrated logistics operational model for green-supply chain management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(4), pages 287-313, July.
  15. Duchin, Faye & Lange, Glenn-Marie, 1995. "The Future of the Environment: Ecological Economics and Technological Change," OUP Catalogue, Oxford University Press, number 9780195085747, March.
  16. Carter, Craig R. & Jennings, Marianne M., 2002. "Social responsibility and supply chain relationships," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(1), pages 37-52, January.
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