Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 4, 2022 erstellt
Description:
Many sustainable firms find their products competing with environmentally unsustainable knockoffs in the market. In this paper, we examine how a firm should invest in the sustainable technology and make pricing decisions in the face of a knockoff competitor. In particular, we study two strategies that have been used by many sustainable firms in practice to cope with the unsustainable knockoffs, i.e., (i) launching an anti-knockoff advertising campaign and (ii) releasing the green technology as open source. The market demand is sensitive to both the price and environmental quality of the products sold by the two competing firms. Our results are as follows. First, even if it is free to launch an anti-knockoff advertising campaign, it may not be profitable for a firm to do so. Second, it could be profitable for a firm to share its green technology for free with the knockoff competitor (i.e., the open-source strategy), especially when consumers on average are very eco-conscious. Third, both strategies could promote innovations in green technology. Finally, from the environmental perspective, while both strategies could help improve the environment, the open-source strategy can generate even better environmental outcome when the market demand is very sensitive towards products' green quality