Abstracts Category : Other

Three Essays in Green Product Development: Co-opetition, Sustainability, and Regulations

by Maryam Hafezi

Pollution, global warming, ozone depletion and the greenhouse effect have brought environmental issues to the fore. As a result, consumers, governments and NGOs have pressured firms to develop green products. Green products are those that strive to protect or enhance the natural environment by conserving energy and/or resources and reducing or eliminating use of toxic agents, pollution, and waste. Pressures from those stakeholders are not the only reasons for firms to become involved in green product development. Other reasons include the opportunities for accessing new markets, enhancing competitive advantages, gaining cost efficiency, and building a better reputation.This dissertation includes three chapters that investigate the effect of development cost, regulations, and co-opetition on green product design and development. The role of green product development cost on product line design decisions is the main focus of the first chapter. I tackle three main research questions in this chapter: (1) How does the environmental quality of the product, in which the research and development costs of green products are crucial and unavoidable, influence a firms product line design? (2) What and how many products should the firm offer? Specifically, when should a firm adopt green product development? (3) How does a firms product line decisions affect the dual goals of benefiting the environment and increasing profits?The effect of governmental regulations on firms product line design decisions is investigated in the second chapter of this dissertation. Governments, by imposing standards, are trying to benefit society by preventing firms from falsely labeling products, and assuring that society will get at least minimum environmental quality by using any available product in the market. By jointly considering the interaction among the consumers preferences, firms product line design strategies, and regulations from government, I look at possible scenarios which will give insights to both firms and government about the effect of such regulations. In this chapter, I investigate under which conditions both society and the firm will reach a win-win outcome in which the firm increases its profit and society gets the advantage of improvements in the environmental quality of products. Also, how strict should the regulations and standards be to drive firms to develop green products, and when will regulations face push-back from the firms?Finally, in the third chapter, I use a game-theoretic approach to understanding how collaboration between competitors, co-opetition, affects the operational decisions such as green product characteristics (quality) and price. Inspired by real market examples, I consider three different development strategies to investigate under which conditions do competitors prefer to collaborate with each other rather than developing green products independently, and which collaboration strategy might they choose. Also, I indicate which strategy among those three product development strategies is