Decision-Making and Coordination in Green Supply Chains with Asymmetric Information

In the evolving landscape of global business, the pursuit of environmental sustainability has emerged as a central pillar of corporate strategy, compelling companies to integrate green practices within their supply chains. This doctoral thesis investigates green supply chain management through the lens of asymmetric information, with a particular focus on the pervasive issue of greenwashing—the act of misleading stakeholders about a firm’s green innovation practices or the greenness of a product.
Guided by a series of research questions, this thesis aims to uncover the mechanisms of greenwashing within supply chain management and explore how asymmetric information influences the implementation of green practices and coordination across the supply chain. Chapter 2 initiates this exploration by providing an extensive review of game-theoretic models in the context of sustainable supply chains with asymmetric information. Through a systematic literature review, this research outlines the current state of the field, identifying a significant gap in quantitative modelling studies that address greenwashing in supply chain contexts. This gap underscores the nascent stage of research in this area and highlights the need for sophisticated analytical tools to better understand the complexities of greenwashing.
Employing game-theoretic modelling approaches, this thesis thoroughly examines across the following three chapters, the decision-making and coordination in supply chains considering both demand expansion and cost reduction effects of green innovation and marketing practices. Specifically, Chapter 3 addresses the challenges posed by stochastic demand in green supply chains, particularly focusing on marginal and development cost-intensive green products. Utilising a sequential game-theoretic framework, this chapter examines how demand uncertainty affects product pricing, greening decisions, and overall supply chain coordination. With cost reduction effects, it is able to identify scenarios where demand uncertainty could, paradoxically, enhance product greenness and market efficiency. Chapter 4 continues the investigation into pathways to green innovations in supply chains with asymmetric process innovation information. It critically examines the interplay between green product innovation, process innovation, and the transparency of these innovations, demonstrating how information asymmetry can lead to greenwashing and negatively impact supply chain dynamics. The chapter proposes contractual and technological solutions to mitigate these adverse effects and encourage genuine green innovation. Finally, Chapter 5 explores green marketing strategies in the context of asymmetric information about product greenness. Developing a signalling game model that considers green marketing as both an influencer of consumer behaviour and a signal of product greenness, this chapter provides insights into the strategic choices firms face in balancing market transparency, greenwashing, and distinctive signalling. It offers a detailed understanding of how market dynamics shape green marketing strategies and their implications for consumer and social welfare. In summary, each chapter contributes to the academic exploration of green supply chain management, paving the way for future research directions and emphasising the importance of information sharing, coordination, and genuine green practices.
Looking ahead, the thesis identifies three promising directions for future research: the development of advanced quantitative models to integrate green practices and study greenwashing, the investigation of the impact of information asymmetry on the diffusion of green innovations, and the exploration of strategies to enhance coordination in green supply chains amidst asymmetric information. These areas offer a rich basis for advancing our understanding of supply chain management with green innovation practices and developing robust strategies to mitigate greenwashing.
In conclusion, this thesis contributes to the rapidly growing field of green supply chain management by shedding light on the challenges and opportunities presented by information asymmetry and greenwashing. By offering a comprehensive analysis and proposing avenues for future research, it lays the groundwork for the development of more sustainable, transparent, and efficient supply chain practices. As the pursuit of environmental sustainability continues to shape the global business landscape, the insights derived from this research will undoubtedly play a crucial role in guiding companies towards more genuine and impactful green initiatives.