A game theoretic approach for advertising and pricing decisions using a new environmental transparency-based demand function considering different government policies

Hossein Khosroshahi () and Seyed Reza Hejazi
Additional contact information
Hossein Khosroshahi: Isfahan University of Technology
Seyed Reza Hejazi: Isfahan University of Technology

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 5, No 10, 11145-11170

Abstract: Abstract This research considers advertising and corporate social responsibility (CSR) in a supply chain. The supply chain composed of a retailer and a manufacturer is considered. It is assumed that the manufacturer chooses one of two strategies: the manufacturer is only concerned with its profit, and the manufacturer is concerned with society's satisfaction level in addition to its profit. Accordingly, in the second strategy, the manufacturer has a utility consisting of profit and consumer satisfaction. Concerning the manufacturer over consumers, satisfaction is assumed as the CSR concern. Therefore, in this study, a measure for determining the satisfaction level in society is developed for the first time. Moreover, we assume that the manufacturer could have environmental transparency in advertising when facing its customers. Hence, it is considered that the demand function is sensitive to advertising transparency. The effect of advertising transparency on the demand function is also considered in this paper. In addition, we assume that the supply chain members are rivals and tend to determine their equilibrium decision variables to earn the maximum profit or utility. At last, based upon the equilibrium values of variables, some analysis and managerial insights are proposed. For instance, when the manufacturer is concerned with CSR, the equilibrium advertising, demand, and the profit of the retailer are higher and the wholesale and retail prices are lower than when he is not concerned about CSR.

Keywords: Transparency; Consumer satisfaction; Government; Sustainable supply chain; Game theory (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10668-023-03228-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:endesu:v:26:y:2024:i:5:d:10.1007_s10668-023-03228-7

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10668

DOI: 10.1007/s10668-023-03228-7

Access Statistics for this article

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development is currently edited by Luc Hens

More articles in Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().