Corporate sustainability interactions: A game theoretical approach to sustainability actions

Damla Durak Uşar, Meltem Denizel and Mehmet Soytas ()

International Journal of Production Economics, 2019, vol. 218, issue C, 196-211

Abstract: Recent global developments lead companies to include into their strategic plans not only economic sustainability but environmental and social sustainability as well. Companies have been investing in environmental and social sustainability to meet stakeholder demand and/or regulatory demands. Considering this as a market mechanism, we view the sustainability actions of companies as interrelated strategic decisions and propose a Stackelberg game to model the effects of competition for sustainability and sustainability spillovers over the sustainability outcomes of companies. We provide equilibrium solutions for the one leader, two followers game over different intervals of competition levels and spillover rates. Using a numerical example, we observe how the sustainability investments and net benefits change as competition levels and spillover rates change and identify the competition-spillover regions, where each player invests the most and has the advantage in terms of benefit. We discuss implications for both the companies and the policy makers.

Keywords: Game theory; Corporate sustainability; Competition; Spillovers; Stackelberg game (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527319301835
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:218:y:2019:i:c:p:196-211

DOI: 10.1016/j.ijpe.2019.05.008

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().