Journal of Cleaner Production 277 (2020) 123969

Contents lists available at ScienceDirect

Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Impact of market regulation on economic and environmental

performance: A game model of endogenous green technological
innovation
Mingyue Wang a, Zhixuan Cheng b, Yingming Li a, d, **, Junqiang Li c, *, Kaixuan Guan a, d
a
Institutes of Science and Development, Chinese Academy of Sciences, No.15, Zhongguancun Beiyitiao, Haidian District, Beijing, 100190, China
b
Institutes of Economics and Administration, University of Malaya, Jalan Universiti, 50603 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia
c
School of Economics and Management, Tongji University, Tongji Building A, Siping Road 1500, Yangpu District, Shanghai, 200092, China
d
School of Public Policy and Management, Chinese Academy of Sciences, No.19(A) Yuquan Road, Shijingshan District, Beijing, 100049, China

a r t i c l e i n f o a b s t r a c t

Article history: Government market regulation is an important measure to overcome market failure. Most previous
Received 6 February 2020 studies have classified regulation as a factor that directly affects the decision-making of green techno-
Received in revised form logical innovation of enterprises (EGTI); however, there has been no systematic analysis of the effects of
19 August 2020
market regulation on EGTI performance. This study constructs a Stackelberg game theory model of
Accepted 26 August 2020
Available online 29 August 2020
endogenous EGTI to analyze the economic benefits and waste emissions of enterprises in five research
scenarios covering different decision methods and regulatory types. Using the linear programming
Handling editor: Bin Chen method, different intensities and types of regulation are assigned to different performance optimizations.
The sensitivity of various exogenous variables to the economic benefits and waste emissions of enter-
Keywords: prises in different scenarios are also analyzed. The results show that government market regulation can
Market regulation significantly improve levels of EGTI and that it is affected by cooperation between enterprises. In
Green technological innovation centralized decision-making scenarios, system emissions will decrease and system economic perfor-
Innovation performance mance will improve. Under market regulation, irrespective of decision type, the system’s economic
Game model
performance will improve. For waste emissions of enterprises, market regulation under centralized
decision-making can reduce the effects, and market regulation under independent decision-making can
increase the effects. With the introduction of market regulations, and for any type of decision, the in-
tensity of waste emissions decreases. In the competitive regulation decision scenario, both the system’s
waste emissions and its economic benefits are minimized. These results show that promoting cooper-
ation between different enterprises can effectively reduce waste emissions and improve economic
performance; different regulations have different effects, and there is a quantitative-offset effect. This
study contributes to greater understanding of these effects by building a game model of endogenous
EGTI, simulating the equilibrium level under five different scenarios, and analyzing the relationship
between economic benefits and waste emissions under different scenarios.
© 2020 Elsevier Ltd. All rights reserved.

1. Introduction consumption of resources and emission of pollutants, China is in a

Resource consumption, environmental pollution, and ecological
degradation are significant threats to human survival and devel-
opment (Salim et al., 2019). With its vast population and large-scale
* Corresponding author.
** Corresponding author.
E-mail addresses: wangmingyue@casisd.cn (M. Wang), eqa190009@siswa.um.
edu.my (Z. Cheng), liyingming@casisd.cn (Y. Li), ljq@tongji.edu.cn (J. Li),
gkx0831@163.com (K. Guan).
new period of accelerating development, optimizing the economic
structure, and transforming growth momentum (Li et al., 2019;
Zhao et al., 2019). The report on the 19th National Congress of the
Communist Party of China has clearly stated the need to cultivate
new growth points and support high-quality development. More
and more organizations and individuals are being mobilized to
adopt green innovation strategies to alleviate the contradiction
between development and environment (Fagerberg, 2018; Silvestre
and Ţîrc

a, 2019). As the international community gradually forms a
consensus on green development, the green technological

https://doi.org/10.1016/j.jclepro.2020.123969
0959-6526/© 2020 Elsevier Ltd. All rights reserved.
2 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
innovation of enterprise (EGTI) has become an essential element of

, 2019).
green growth (Aldieri et al., 2019; Silvestre and Ţîrca
In any period, economic growth is driven by a dominant tech-
nology cluster, which is a set of interconnected technological in-
novations, infrastructure constructions, and organizational
innovations (Uppenberg, 2009). The traditional concept of tech-
nological innovation focuses on the speed and scale of develop-
ment, ignoring environmental benefits and development quality;
non-green technological innovation accelerates the destruction of
resources and damages the ecological environment, which is un-
sustainable (Barbieri et al., 2020).
Green technology is defined as an emerging technology that can
reduce energy consumption, decrease pollution emissions, improve
the ecological environment, promote the construction of ecological
civilization, and realize the harmonious coexistence of humans and
nature (Xia et al., 2015; Jiao et al., 2020). This definition of green
technology is consistent with that given by the Ministry of Science
and Technology of China. Green technological innovation takes the
protection of the environment into account when evaluating eco-
nomic benefits (Xu et al., 2018; Xia et al., 2019). Innovation per-
formance refers to the consequences of adopting innovative
activities, and usually includes economic performance, environ-
mental performance, and social performance (Jian and He, 2018;
Ma et al., 2018). This article focuses on the first two aspects, taking
economic performance as the extra economic benefit brought by
adopting a green technology innovation strategy, and taking envi-
ronmental performance as the reduction in pollutant emissions
brought about by the same strategy. Compared with traditional
production enterprises, green technological innovation enterprises
can improve production processes by using clean energy and more
environmentally friendly materials; they can improve economic
performance by reducing production costs and improving market
competitiveness; and they can improve environmental perfor-
mance by reducing waste emissions.
Green technological innovation is not only an extension and
improvement of traditional technological innovation, but also a
new form of technological innovation from the perspective of
ecological civilization. The cleanliness, efficiency, and sustainability
of green technology determine its dominance in the technology
cluster (Barbieri et al., 2020). Carrying out green technological
innovation is a crucial method for breaking the links between
economic development, environmental pollution, and excessive
resource consumption (Fernando and Wah, 2017; Hazarika and
Zhang, 2019). Years of exploration have greatly enhanced the
green technological innovation capacity of China. The China Green
Patent Statistics Report (2014e2017) shows that the number of green
invention patent applications in China in 2017 was approximately
1.8 times that of 2014. Nonetheless, the cumulative number of
patent applications for green technology from 2014 to 2016 was
168,000, which accounts for only 6% of patent applications in China
during that period. The same report confirms that most of these
green technological innovation patents are to be found in univer-
sities and research institutes rather than in enterprises.
Previous studies have identified different factors that affect
enterprise investment in green technological innovation. For
example, Dost et al. (2019) examined the influence of innovation on
pollution prevention technologies and found that organizational
capital further strengthened the effects of the early introduction of
green product innovation. Triguero et al. (2013) found that supply-
side, demand-side, and regulatory factors played different roles in
encouraging the adoption of eco-innovation. Owing to unclear
definitions of environmental property rights and the limitations of
accounting systems in dealing with innovation income, part of the
income of green technological innovation enterprises is shared by
other social agents (Stucki, 2019). For example, when the green
technology innovation of enterprises improves environmental
quality, the general public does not need to bear some of the costs
of creating a better environment. This mismatch of costs and
benefits from green technological innovation will lead to “Gre-
sham’s law” dilemmas, which will ultimately result in market
failure (Chegut et al., 2019; Schot and Steinmueller, 2018). Gre-
sham’s law is the principle that bad money drives out good money,
or, in this context, that green products are less competitive.
Given the multiple externalities of green technological innova-
tion, relying solely on the market will not allow social investment
to reach optimal levels (He et al., 2018; Li et al., 2017; Martínez-
Zarzoso et al., 2019; Wang, 2018). The market-oriented regulatory
approach is a practical policy tool for overcoming market failures
and promoting long-term economic growth (Cai and Li, 2018; Salim
et al., 2019). It involves using market mechanisms to optimize the
allocation efficiency of elements for innovation. Javier Aguilera-
Caracuel (2013) comprehensively analyzed supply and demand,
competition, and price mechanisms for reducing uncertainty and
multiple externalities. Currently, in China, the environmental
management system is dominated by government regulations; the
lack of a market-oriented regulatory approach leaves the market
unable to play an effective role in optimizing the allocation of green
technology innovation resources (Chakraborty and Chatterjee,
2017; Xia et al., 2015).
These considerations raise a number of important questions. (i)
In terms of the green technological innovation of enterprises, what
are the conditions for market equilibrium under government
market regulation? (ii) What happens to innovation performance,
including economic and environmental performance, under
different types of market regulation? (iii) What is the relationship
between environmental performance and economic performance?
Game theory is a mathematical method of studying the phe-
nomenon of competition. It systematically analyzes the predicted
and actual behavior of individuals in a game to identify their
optimization strategies. A Stackelberg game model is a model of
production leadership in which the difference of action order be-
tween players reflects the asymmetric nature of competition
among enterprises Ma et al. (2018). In the production context, the
leading manufacturer first makes a production decision, and then
the following manufacturer can observe that decision and deter-
mine its own production accordingly. The present study takes green
technological innovation enterprise and traditional production
enterprise as its objects. The influence of different market regula-
tions is embedded in the game decision-making, allowing the
production decision-making, green technological innovation level,
and performance of enterprises to be calculated. The ability of the
game model to systematically analyze the decision-making and
corresponding performance of each game player under different
scenarios makes it suitable for the research aims of this study.
To answer the three questions formulated above, this paper
proceeds as follows. Section 2 reviews the relevant literature and
finds the research gaps that relate to the themes of this study.
Section 3 sets out the assumptions of the analysis models, and
Section 4 constructs and solves these models under different sce-
narios. Section 5 provides a sensitivity analysis of relevant factors
using numerical simulation. The final section presents the conclu-
sions, implications, and limitations of this study.
2. Literature review
2.1. Market regulation and EGTI
Scholars have carried out abundant research based on different
backgrounds, methods, and industries, which provides a suitable
foundation for this paper and for answering its questions. Wang J R
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
(2018) found that incentive market regulation is more conducive to
EGTI than a command-and-control approach. Doran and Ryan
(2012) argued that specific government regulatory policies can
apply explicit and standard content to ecological innovators and
polluters and can guide enterprises’ behavior in compliance with
regulatory standards.
Lin and Chen (2019) found that electricity price has a long-term
positive impact on renewable energy technology innovation; for
every 1% increase in electricity price, renewable energy technology
innovation will increase by 0.7825e1.0952%. An OECD report
observed that the patent system for green technologies is an in-
tellectual property protection and enforcement system that can
promote the diffusion of green technologies (OECD, 2011). Yang and
Maskus (2001) pointed out that countries have established specific
mechanisms for protecting intellectual property that can promote
EGTI, such as extending the license commitment period and
accelerating patent examination for environmental technologies.
Rainville (2017) argued that green purchasing by government is one
of the critical factors that affect EGTI. The results of Wang et al.
(2019) indicated that a carbon tax could effectively promote low-
carbon technological innovation by enterprises.
The risk of technological innovation refers to the possibility that
technological innovation activities can not reach the expected goal
due to the uncertainty of external environment, the difficulty and
complexity of technological innovation project itself, and the lim-
itation of innovator’s own ability and strength. The risk facing
technological innovation is that it will not be able to achieve its
goals because of the uncertainty of the external environment, the
difficulty and complexity of technological innovation itself, and
limitations on the strength and ability of the innovators. Li et al.
(2018) found that green loan subsidies not only increased willing-
ness to carry out EGTI but also reduced the risks of innovation.
Wang et al. (2017) found that green insurance did not improve the
ability of enterprises to innovate or increase their profits, but it did
reduce the risks of innovation; that green insurance subsidies and
government subsidies both promote EGTI; and that green insurance
subsidies have lower levels of innovation risk than direct subsidies.
Market regulation affects not only EGTI but also the performance of
EGTI.
2.2. Impact of market regulation on EGTI performance
To date, research has focused on the impact of different market
regulations on the innovation performance of EGTI. Although there
may be differences in the effect of regulation on technological
innovation performance, the literature makes it clear that regula-
tions can improve performance by affecting the costs and benefits
of the environmental behavior of enterprises (Ren et al., 2018). Wan
(2013) analyzed the impact of environmental regulation on in-
dustrial competitiveness, innovation capability, and environmental
protection capability. The results showed that pollution emission
taxation had a detrimental effect on innovation performance. Jian
and Heng (2018) measured the performance of green trans-
formation in 13 high-patent-intensive manufacturing industries in
China, exploring the factors that influence industrial green tech-
nological innovation performance. They found that environmental
regulation had a restraining effect on green technology perfor-
mance. Factors such as enterprise scale, capital deepening, market
competition, and introduction of foreign capital significantly
boosted industrial innovation performance, while the configuration
structure of technology introduction had no significant impact.
Hamamoto (2006) took the manufacturing industries of seven
EU countries as research objects, and found that the regulation of
energy taxes had a significant and direct promoting effect on en-
terprise productivity. Wang (2002) pointed out that emissions
3
charges are positively related to the enthusiasm of enterprises for
reducing pollution. Xu et al. (2018) tested the dynamic impact of
equity financing, debt financing, and government subsidies on EGTI
at different life stages. Li (2018) used multiple regression analysis to
measure the impact of environmental policy tools and their inter-
action terms on environmental technology innovation and corpo-
rate performance, and also considered factors such as the level of
corporate environmental management and the environmental
awareness of managers. Wang and Wheeler (2005) demonstrated a
relationship between regulation and environmental performance
in the context of emissions charges; Langpap and Shimshack (2010)
examined the same relationship from the perspective of public
participation, and Cha vez et al. (2009) from the perspective of
market-motivated regulation.
2.3. Summary of the literature
There have been few systematic studies on EGTI, market oper-
ation decisions, economic performance, or environmental perfor-
mance under different market regulations. Most research has
focused on the impact of government market regulation on the
green technological innovation behavior of enterprises (Wang J R,
2018; Lin and Chen, 2019; Wang et al., 2019). Regarding green
technological innovation performance, some studies have focused
on economic performance and others on environmental perfor-
mance (Langpap and Shimshack, 2010; Jian and Heng, 2018).
However, the relationship between the two types of performance
has received too little attention. Although some studies have
involved dual performance in the analysis process, there has been
no analysis of the interaction between behavior and performance
(Langpap and Shimshack, 2010; Xu et al., 2018).
To sum up, market failure is an important factor in restraining
EGTI. Government mechanisms for price subsidy, risk reduction,
standard access, property rights definition and protection, and
green procurement are effective means for remedying market
failure in green technological innovation. At the same time, there
are differences in the impact of market regulations on the green
technological innovation performance of enterprises, which is not
homogeneous, and may include economic performance and envi-
ronmental performance. It is therefore necessary to adopt a sci-
entific and comprehensive research design that takes account of
market regulations, decision-making, green technological innova-
tion, and innovation performance. This paper will analyze the
optimal decision-making and green technological innovation per-
formance of enterprises under different regulatory and decision-
making scenarios. The conclusions will provide a reference for
improvements to green development theory and for building a
market-oriented green technological innovation system.
3. Hypothesis development
Green technology innovation, which emphasizes lower energy
consumption, reductions in emissions, and improvements in
recycling and cleaning, is considered one of the critical ways to
realize green economic development (Silvestre and Ţîrca
, 2019).
Given the multiple externalities of green technological innovation,
relying solely on the effect of the market is not enough to allow
social investment to reach optimal levels (Liu et al., 2019;
€belmann and Wendler, 2020). Ramanathan et al. (2017) pointed
To
out that government regulation is a valid method for overcoming
market failures. Among regulatory tools, market-oriented statutory
instruments are more effective than administrative orders (Wang
et al., 2019). Government regulation will first affect EGTI and then
improve production performance, ultimately benefiting society as
whole.
4 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
To set out the research problem precisely, the following as-
sumptions were formulated.
(1) Recent method designs (Zhang et al., 2016; Zhou et al., 2018)
take the market demand (D1 ) of green technological inno-
vation enterprises (M1 ) as a linear function of their product
price (p1 ), non-green product price (p2 ), and green techno-
logical innovation level (q), as in Equation (1). Similarly, the
market demand (D2 ) of the traditional manufacturing en-
terprises (M2 ) is a linear function of their product price (p2 )
and green product price, as in Equation (2).
D1 ¼ εa  bp1 þ gp2 þ lq
D2 ¼ ð1  εÞa  bp2 þ gp1
In Equations (1) and (2), a represents the potential market de-
mand. The symbols b and g denote the price and cross-price
sensitivity of demand, respectively, satisfying the condition b >
g > 0. This means that demand is more affected by changes in price
than by the effects of alternative products. The parameter lðl  1Þ is
the demand expansion effectiveness coefficient of green products.
εð0  ε  1Þ indicates the degree of customer loyalty to green
products, which is positively related to environmental awareness.
1  ε gives the public’s preference for non-green products.
(2) Multiple externalities and uncertainties dampen investment
enthusiasm for EGTI, which therefore needs appropriate
government regulations (Ramanathan et al., 2017). As
Ritzenhofen et al. (2016), Wang et al. (2019), and others have
found, government can use means such as taxation and
subsidies to support enterprises to carry out green techno-
logical innovation. Following the approaches of Madani and
Rasti-Barzoki (2017) and Sinayi and Rasti-Barzoki (2018), it
is assumed that government will offer subsidy t1 to enter-
prises that carry out green technological innovation. Simi-
larly, government will also levy a tax t2 on traditional
production enterprises if they exceed the emission standards
set by local government. Therefore, in the case of govern-
ment regulation, the demand functions of the products are
adjusted, as in Equations (3) and (4), respectively.
D1 ¼ εa  bðp1  t1 Þ þ gðp2 þ t2 Þ þ lq
D2 ¼ ð1  εÞa  bðp2 þ t2 Þ þ gðp1  t1 Þ
(3) In addition to being an economic activity, the production of
traditional products or green products has specific external
effects on the ecological environment. This is because en-
terprises adopt a green technological innovation strategy to
reduce waste emissions directly or indirectly, in contrast
with the production of traditional products. For example,
thermal power enterprises reduced SO2 emissions by using
desulfurization and denitrification technology. This study
therefore assumes that, without any degree of green tech-
nological innovation, the waste emitted by producing a unit
of traditional product is Q0 , and that as the level of EGTI in-
creases, the waste emissions per unit product decreases. For
this reason, Q1 ¼ Q0  4q, where 4 indicates the influence of
green technological innovation on reducing the waste
emissions of enterprises’ production. Since the waste emis-
sion Q1 is a non-negative value, the condition q  Q0 =4 must
be suitable for this purpose. This allows the calculation of the
total waste emissions of manufacturers of green products
and traditional products, as in Equation (5).
E ¼ Q0 D2 þ D1 ðQ0  4qÞ (5)
(4) Regarding the calculation of enterprises’ green production
costs, mainstream academic opinion holds that green tech-
nological innovation or green production will not affect the
marginal cost of traditional production, and that green pro-
duction requires enterprises to make additional investment
compared to traditional production. Existing studies (Wang
(1)
et al., 2019) have taken the cost of GTI as a quadratic func-
tion of its level of technological innovation (q), namely,
(2) 2
CðqÞ ¼ hq . Drawing on Hafezalkotob (2018), it is assumed
that the production costs of enterprises include traditional
production costs, fixed costs, and green technological inno-
vation costs, whereas traditional production costs include
only the first two of these, as in Equation (6).
2
C1 ¼ v1 D1 þ f1 þ hq1 C2 ¼ v2 D2 þ f2 (6)
vi represents the production cost per unit of traditional product,fi
represents the fixed production costs, and h represents the cost
coefficient of EGTI. The names and notations of the variables used in
this study are given in Table 1. [Insert Table 1 here]
4. Methodology
A Stackelberg game model is a production leadership model.
The leading manufacturer decides on a production, and then the
following manufacturer can observe the production and decide on
its own production accordingly. By introducing the government’s
behavior into the model, we can analyze the decision-making
choice of different agents. This study takes green technological
innovation enterprises and traditional production enterprises as its
objects. It embeds different market regulations into the game
decision-making and then calculates the production decision-
making, green technological innovation level, and corresponding
performance.
To study the influence of government regulations and market
(3) decision types on decision agents, we set up five scenarios, one
with price deregulation and centralized decision-making (Scenario
1), one with price deregulation and independent decision-making
(4) (Scenario 2), one with price regulation and centralized decision-
making (Scenario 3), one with price regulation and independent
decision-making (Scenario 4), and a competitive regulation sce-
nario (Scenario 5). We compared and analyzed the market equi-
librium results under each scenario, as well as the economic and
environmental performance. Finally, we carried out a sensitivity
analysis of the external factors that affected the environmental and
economic performance of the enterprises (Fig. 1) [Insert Fig. 1 here].
4.1. Scenario 1: Price deregulation and centralized decision-making
In the price deregulation and centralized decision-making sce-
nario, traditional production manufacturing enterprises and green
production manufacturing enterprises form a cooperative system,
and the main goal of decision-making is to maximize the economic
benefits of this system. Given the above description of the problems
and assumptions, the system benefit can be determined as in
Equation (7).
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969 5

Table 1
Variables notation.

Variable name Notation Variable name Notation

M1 Green products manufacturer t2 Tax on traditional production

M2 Traditional products manufacturer E Total waste emissions of production
D1 Market demand for green products C1 Production costs of green products
D2 Market demand for traditional products C2 Production costs of traditional products
q Level of green technological innovation PSCi System economic benefits for scenario i
p1 Pricing of green products PM1 Economic benefits of green products manufacturer
p2 Pricing of traditional products PM2 Economic benefits of traditional products manufacturer
t1 Subsidy for green production

Fig. 1. Research design.

PSC1 ¼ ðp1  v1 ÞD1 þ ðp2  v2 ÞD2  f1  f2  hq2 vPSC1

¼ gðp1  v1 Þ  bðp2  v2 Þ þ ð1  εÞa  bp2 þ gp1 ¼ 0
¼ ðp1  v1 Þðεa  bp1 þ gp2 þ lqÞ þ ðp2  v2 Þ vp2
2
(9)
½ð1  εÞa  bp2 þ gp1   f1  f2  hq (7)

vPSC1
¼ lðp1  v1 Þ  2hq ¼ 0 (10)
Proposition 1. In the price deregulation and centralized decision- vq1
making scenario, there is a unique price level of traditional products, Similarly, we can also determine the Hessian matrix PSC1 of p1 ,
price level of green products, and level of EGTI that maximizes the p2 , and q1 , as in Equation (11).
economic benefits of the product production system:
0 1
v2 PSC1 v2 PSC1 v2 PSC1

 2  2 B vp1 p2 vp1 q1 C
2ah½g þ εðb  gÞ þ v1 2h b  g2  bl B vp21 C
p1* B C 0 1
1 ¼  2  B C
4h b  g2  bl
2 B v2 P C 2b 2g l
SC1 v PSC1 v PSC1 C @
2 2
B
Hðp1 ; p2 ; q1 Þ ¼ B C ¼ 2g 2b 0 A
B vp2 p1 vp22 vp2 q1 C
B C l 0 2h

 2  B C
2
 2  2 B 2 C
v2 4h b  g2  bl þ a ð1  εÞ 4bh  l þ 4gεh  v1 gl @ v PSC1 v2 PSC1 v2 PSC1 A
p1*
2 ¼
 2  
2 4h b  g2  bl
2 vq1 p1 vq1 p2 2
vq1
(11)

l½ag þ ðb  gÞðv1 b þ v1 g  aεÞ It can be seen that when the precondition 4hðb2 g2 Þ  bl2 > 0 is
q1* ¼   satisfied, the matrix is a negative definite matrix aboutp1 p2 , and q.
4h b2  g2  bl2
This means that the optimal traditional product pricing, green
Proof: Using Equation (7), the first-order conditions for the product pricing, and level of EGTI can be determined. Solving the
enterprises’ decision variablesp1 , p2 , and q1 are given by Equations system of equations consisting of Equations (8)e(10) allows the
(8)e(10). optimal values of these decision variables to be identified, as in
Equations (12)e(14).

vPSC1
 2 
¼ ðεa  bp1 þ gp2 þ lq1 Þ  bðp1  v1 Þ þ gðp2  v2 Þ ¼ 0 2
vp1 2ah½g þ εðb  gÞ þ v1 2h b  g2  bl
p1*
1 ¼  2  (12)
(8) 4h b  g2  bl2
6 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969

we assume that the traditional product manufacturer M2 is the

 2  2
 2  2
v2 4h b  g2  bl þ a ð1  εÞ 4bh  l þ 4gεh  v1 gl market leader and that the green product manufacturer M1 is the
p1*
2 ¼
 2  2  follower. M2 first determines the price of traditional products to
2 4h b  g2  bl
maximize its benefits. After receiving information about the deci-
(13) sion of M2, the green product manufacturer M1 sets its optimal
product price and level of EGTI to maximize its own revenue.
l½ag þ ðb  gÞðv1 b þ v1 g  aεÞ
q1* ¼   (14) Proposition 2. In the price deregulation and independent decision-
4h b2  g2  bl2 making scenario, there is a unique price level of traditional products,
price level of green products, and level of EGTI that maximizes the
Introducing these results into Equations (1) and (2), respec- economic benefits:
tively, the market demand for traditional products and green

 2   
  
v1 2bh  l þ 2aεh þ ghv2 gh v1 g l2  2bh þ a ð1  εÞ l2  4bh  2gεh 2* v2
p2*
1 ¼ 2
  2  2 2
p2 ¼
4bh  l 4bh  l 4b h þ 2g2 h  bl 2
 
  
v1 g 2bh  l2 þ a 4bhð1  εÞ þ ε 2gh þ l2  l2
þ  2 2 
2 4b h þ 2g2 h  bl

products in this scenario can be identified, as in Equations (15) and

(16).

 3 2
2  2 2 
1* v2 g v1  4b h þ 4bg2 h þ g2 l þ a 4b εh þ g  4gεh þ l  εl
D1 ¼ εa  bp1*
1 þ gp2 þ lq
1*
¼ þ
 2  2
(15)
2 2 h 4b  4g2  bl

h    i
2* v2 gl lv1 2b2 l2  4bh þ g2 6bh  l2
að1  εÞ þ v1 g  v2 b q ¼  þ    þ
2 ¼ ð1  εÞa  bp2 þ gp1 ¼
D1* 1* 1*
(16) 2 4bh  l2 2 4bh  l2 4b2 h þ 2g2 h  bl2
2
     o
al 2εh 4b2  g2 þ gð1  εÞ 4bh  l2  2bεl2
  
4.2. Scenario 2: Price deregulation and independent decision- 2 4bh  l2 4b2 h þ 2g2 h  bl2
making
Proof: In the price deregulation and independent decision-
In the price deregulation and independent decision-making making scenario, the decision variables for maximizing the bene-
scenario, traditional product manufacturers and green product fits of green product manufacturing enterprise M1 are green
manufacturers make independent decisions to maximize their own product price and level of EGTI; the decision variable for maxi-
benefits. We can determine the revenue function of traditional mizing the benefits of traditional product manufacturing enterprise
product manufacturing enterprises and green product M2 is traditional product price. Therefore, the optimal traditional
manufacturing enterprises, as in Equations (17) and (18). product price, green product price, and level of EGTI can be deter-
mined from Equations (17) and (18), as in Equations (19)e(21).
PM1 ¼ ðp1  v1 ÞD1  f1  hq2 ¼ ðp1  v1 Þðεa  bp1 þ gp2 þ lqÞ
vPM1
 f1  hq
2 ¼  2p1 b þ v1 b þ p2 g þ aε þ lq ¼ 0 (19)
vp1
(17)
vPM1
PM2 ¼ ðp2  v2 ÞD2  f2 ¼ ðp2  v2 Þ½ð1  εÞa  bp2 þ gp1   f2 ¼  2hq þ ðp1  v1 Þl ¼ 0 (20)
vq
(18)
vPM2
PM1 and PM2 represent the revenue of green product ¼ a  2p2 b þ v2 b þ p1 g  aε ¼ 0 (21)
vp2
manufacturing enterprises and traditional product manufacturing
enterprises, respectively. We can determine that vPM1 is a Hessian matrix about p1 and q,
Given the phase characteristics of EGTI and product diffusion, as in Equation (22).
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969 7

scenario can be determined. Analogously, when Equations

0 1
v2 PM1 v2 PM1 (26)e(28) are introduced into Equations (17) and (18), the eco-
B vp2 vp1 q C nomic benefits of traditional production enterprises and green
B 1 C 2b l
Hðp1 ; qÞ ¼ B
B
C¼
C (22) product production enterprises can be determined. Introduced into
@v P l 2h
2
M1 v P A
2
M1 Equation (5), these results determine the amount of waste emis-
vqp1 vq
2 sions in the production process.

Equation (22) shows that when the precondition 4bh > l2 is

satisfied, the matrix is a negative definite matrix about p1 and q. The 4.3. Scenario 3: Price regulation and centralized decision-making
equation can determine the price of green products and the level of
EGTI for maximizing the revenue of M1. Solving Equations (19) and Under government market regulation, the government de-
(20), we obtain Equations (23) and (24). termines the intensity of market regulations t1 and t2 to minimize
  waste emissions. After receiving government regulatory informa-
v1 2bh  l2 þ 2hðp2 g þ aεÞ tion, enterprises make corresponding decisions to maximize their
p2*
1 ¼ 2
(23) profits. In the price regulation and centralized decision-making
4bh  l
scenario, traditional product manufacturing enterprises and green
product manufacturing enterprises form a cooperative system, and
ðv1 b  p2 g  aεÞl
q2* ¼  (24) the system benefits of product manufacturing enterprises are as in
4bh  l2 Equation (29):

When Equation (24) is introduced into Equation (18), the reve-

nue function of a traditional product manufacturing enterprise is PSC3 ¼ ðp1  v1 ÞD1 þ ðp2  v2 ÞD2  f1  f2  hq2
h i
transformed into Equation (25). By finding the first and second ¼ ðp1  v1 Þ εa  bðp1  t1 Þ þ gðp2 þ t2 Þ þ lq
vPM
2
h i (29)
derivative of p2 ( vp22
2
¼  2b < 0) and making its first derivative þ ðp2  v2 Þ ð1  εÞa  bðp2 þ t2 Þ þ gðp1  t1 Þ
equal to zero, the optimal price of traditional products in such 2
scenarios can be determined, as in Equation (26).  f1  f2  hq

  
g v 2bh  l2 þ 2hðp2 g þ aεÞ
PM2 ¼ ðp2  v2 Þ ð1 εÞa  bp2 þ 1  2
2b 4bh  l Proposition 3. In the scenario of price regulation and centralized
decision-making, the optimal pricing level of traditional products, the
 f2 pricing level of green products, and the level of EGTI can be set to
(25) maximize the economic benefits of the product production system, as
follows:
vPM2
¼ 00p2*
2  
  
vp2 2ht1 b2  g2 þ 2ha½gð1  εÞ þ bε þ v1 2h b2  g2  bl2
 2
 2 2 p3*
v2 v1 g 2bh  l þ a 4bhð1  εÞ þ ε 2gh þ l  l 1 ¼
¼ þ 4b2 h  4g2 h  bl2
 2 2
2 2 4b h þ 2g2 h  bl
(26)
 2 
v2  t2 gl ðt1  v1 Þ þ a 4gεh  ð1  εÞ l  4bh
2

Substituting Equation (26) into Equations (23) and (24) allows p3*
2 ¼ þ  2 2 
2 2 4b h  4g2 h  bl
the optimal price and optimal level of green technological inno-
vation of green product manufacturing enterprises to be deter-
  
mined, as in Equations (27) and (28). 3* l ðt1  v1 Þ b2  g2 þ aðg þ bε  gεÞ
q ¼
 2
4b2 h  4g2 h  bl2
v1 2bh  l þ 2aεh þ ghv2
p2*
1 ¼ Proof: Using Equation (29), the first-order critical conditions for
4bh  l2
  
   the enterprise decision variables p1 , p2 , and q1 are given in Equa-
gh v1 g l2  2bh þ a ð1  εÞ l2  4bh  2gεh tions (30)e(32).
  2  2 2
(27)
4bh  l 4b h þ 2g2 h  bl
vPSC1
¼  bð2p1  t1  v1 Þ þ ð2p2 þ t2  v2 Þg þ εa þ ql ¼ 0
h    i vp1
2* v2 gl lv1 2b2 l2  4bh þ g2 6bh  l2 (30)
q ¼  þ
   þ
2 4bh  l2 2 4bh  l2 4b2 h þ 2g2 h  bl2
   o vPSC1
  ¼ gð2p1  v1  t1 Þ  bð2p2  v2 þ t2 Þ þ ð1  εÞa ¼ 0 (31)
al 2εh 4b2  g2 þ gð1  εÞ 4bh  l2  2bεl2 vp2
  
2 4bh  l2 4b2 h þ 2g2 h  bl2
vPSC1
¼ ðp1  v1 Þl  2hq ¼ 0 (32)
(28) vq
By applying Equations (26)e(28) to Equations (1) and (2), the Similarly, we can determine the Hessian matrix PSC3 of p1 p2 ,
market demand for traditional and green products under this and q1 , as in Equation (33).
8 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969

0 1 enterprises as follows:
v2 PSC3 v2 PSC3 v2 PSC3
B vp1 p2 vp1 q C
B vp21 C ghðt2 þ v2 Þ x t h þ x2 v1 þ ahx3
B C 0 p4* þ 2 1 1
B C 1 1 ¼ 2  2
B v2 P C 2b 2g l 4bh  l
2
4b h  2g2 h  bl 4bh  l
SC3 v PSC3 v PSC3 C @
2 2
B
Hðp1 ; p2 ; qÞ ¼ B C¼ 2g 2b 0 A
B vp2 p1 vp22 vp2 q C
B C l 0 2h
v2  t2
B C
B 2 C p4*
2 ¼
@ v PSC3 v PSC3 v PSC3 A
2 2
2
 
  
vqp1 vqp2 vq21 ðv1  t1 Þ 2bgh  gl2 þ a ð1  εÞ 4bh  l2 þ 2gεh
þ  2 
(33) 2 4b h  2g2 h  bl2

From Equation (33), when the condition 4hðb g2 Þ bl > 0 is

2 2

satisfied, the matrix is a negative definite matrix of p1 p2 , and q. 2lðt1 b  v1b þ t2 g  aεÞ  glt2 þ v2 gl
q4* ¼   þ
That is, by solving the equation set consisting of Equations 2 4bh  l2
(30)e(32), the optimal values of traditional product price, green    i


product price, and levels of EGTI can be determined, as in Equations gl 2bgh þ gl2 ðt1  v1 Þ þ að1  εÞ 4bh  l2 þ 2agεh
(34)e(36).  2  
2 2
2 4b h  2g2 h  bl 4bh  l
 
  
2ht1 b2  g2 þ 2ha½gð1  εÞ þ bε þ v1 2h b2  g2  bl2
p3*
1 ¼ In particular:
4b2 h  4g2 h  bl2
(34) x1 ¼ 8b3 h  6bg2 h  2b2 l2 þ g2 l2 ; x2
 
3 2 2 2 4
2
 2  ¼ 8b h2  6b hl þ g2 hl þ b  2g2 h2 þ l
v2  t2 gl ðt1  v1 Þ þ a 4gεh  ð1  εÞ l  4bh
p3*
2 ¼ þ  2 2
2 2 4b h  4g2 h  bl h i h i
x3 ¼ 8b εh  g 2gεh þ ð1  εÞl þ 2b 2gð1  εÞh  εl
2 2 2
(35)

   Proof: In the price regulation and independent decision-making

l ðt1  v1 Þ b2  g2 þ aðg þ bε  gεÞ scenario, two product manufacturers make decisions indepen-
q3* ¼ 2 2
(36)
4b h  4g2 h  bl dently to maximize their own benefits. The decision variables for
maximizing the benefits of green product manufacturers are the
By applying Equations (34)e(36) to Equations (3) and (4), the price of green products and the level of EGTI, whereas the decision
market demand for traditional and green products under this sce- variable for traditional product manufacturers is the price of
nario can be determined. Analogously, when Equations (34)e(36) traditional products. For this reason, the optimal price of traditional
are introduced into (29), the systematic economic benefits of products, the price of green products, and the level of EGTI can be
traditional production enterprises and green product production determined using Equations (37) and (38), as in Equations
enterprises under this scenario can be determined. Introduced into (39)e(41).
Equation (5), these results determine the amount of waste emis-
sions in the production process. vPM1
¼  bð2p1  v1  t1 Þ þ ðp2 þ t2 Þg þ aε þ ql ¼ 0 (39)
vp1
4.4. Scenario 4: Price regulation and independent decision-making
vPM1
In the scenario of price regulation and independent decision- ¼  2hq þ ðp1  v1 Þl ¼ 0 (40)
vq
making, traditional product manufacturers and green product
manufacturers make independent decisions to maximize their
vPM2
profits. We can determine the revenue function of traditional ¼ að1  εÞ  bð2p2 þ t2  v2 Þ þ gðp1  t1 Þ ¼ 0 (41)
product manufacturing enterprises and green product vp2
manufacturing enterprises, as in Equations (37) and (38). In the scenario of price regulation and independent decision-
making, after receiving information about the decision of M2, the
PM1 ¼ ðp1  v1 ÞD1  f1  hq2 ¼ ðp1  v1 Þ½εa  bðp1  t1 Þ green product manufacturer M1 sets its optimal product price and
(37)
2
þ gðp2 þ t2 Þ þ lq  f1  hq level of EGTI to maximize its own revenue. We can determine the
Hessian matrix vPM1 for p1 and q, as in Equation (42).
PM2 ¼ ðp2  v2 ÞD2  f2 ¼ ðp2  v2 Þ½ð1  εÞa  bðp2 þ t2 Þ 0 1
(38) v2 PM1 v2 PM1
þ gðp1  t1 Þ  f2 B vp2
B vp1 q C
C
1 2b l
Hðp1 ; qÞ ¼ B
B
C¼
C (42)
PM1 and PM2 represent the revenue of green product @ v2 P l 2h
M1 v2 PM1 A
manufacturing enterprises and traditional product manufacturing
enterprises, respectively. vqp1 vq
2

Proposition 4. In the price regulation and independent decision-
making scenario, we can determine the optimal price level of tradi-
tional products, the price level of green products, and the level of EGTI
that will maximize the economic benefits of traditional product
manufacturing enterprises and green product manufacturing
From Equation (42), when the condition 4bh > l2 is satisfied, the
matrix is a negative definite matrix of p1 and q, and the optimal
solution for the price of green products and level of EGTI can be
determined by solving Equations (39) and (40) simultaneously. The
results are as follows.
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969 9

research and a mathematical method that can enhance scientific

 
2t1 bh þ 2h½ðp2 þ t2 Þg þ aε þ v1 2bh  l2 management. It is widely used in economic analysis, management,
p4*
1 ¼ (43) and engineering technology, as it provides a scientific basis for
4bh  l2 optimal decision-making with rational use of limited human, ma-
terial, and financial resources. In this study, it is used to analyze the
½ðt1  v1 Þb þ ðp2 þ t2 Þg þ aεl decision-making of enterprises and governments to achieve the
q4* ¼ (44) goal of minimum waste emissions under certain constraints.
4bh  l2
In the competitive regulation scenario, the government sets a
We can then introduce Equations (43) and (44) into Equation threshold for the maximum waste emission per unit product. Only
(38) and transform the revenue function of traditional product when the emissions per unit product are below this threshold can
manufacturing enterprise into Equation (45). By finding the first production of the product be carried out; otherwise, the product
vPM
2
must be withdrawn from the market. We assume that the threshold
and second derivative ( vp22
2
¼  2b < 0) of p2 and making its first
value set by the government is lower than the amount of waste
derivative equal to 0, the optimal price of traditional products in emissions in the production of traditional products. Thus, in this
such scenarios is determined, as in Equation (46).

   
2t1 bh þ 2h½ðp2 þ t2 Þg þ aε þ v1 2bh  l2
PM2 ¼ ðp2  v2 Þ ð1  εÞa  bðp2 þ t2 Þ þ g 2
 t1  f2 (45)
4bh  l

 2
 2 
vPM2 v2  t2 ðv1  t1 Þ 2bgh  gl þ a ð1  εÞ 4bh  l þ 2gεh
¼ 00p4*
2 ¼ þ   (46)
vp2 2 2 4b2 h  2g2 h  bl2

By introducing Equation (46) into Equations (43) and (44), the scenario, traditional products are forced to withdraw from the
optimal price and the innovation level of green product market, but green product enterprises are able to deploy
manufacturing enterprises can be determined, as in Equations (47) throughout the market. Under government regulation, green
and (48). product manufacturers can maximize their benefits by setting the
product price and level of EGTI as in Equation (49).
ghðt2 þ v2 Þ x t h þ x2 v1 þ ahx3
p4*
1 ¼ 2
þ 2 1 1 2  2
(47)
4bh  l 4b h  2g2 h  bl 4bh  l max PM1 ¼ ðp1  v1 ÞD1  f1  hq2 ¼ ðp1  v1 Þða  bp1 þ lqÞ
2 Q  Qg
2lðt1 b  v1 b þ t2 g  aεÞ  glt2 þ v2 gl  f1  hq st:Q1 ¼ Q0  pq  Qg 0q  0
q4* ¼  þ p
 2
2 4bh  l (49)

    i
gl 2bgh þ gl2 ðt1  v1 Þ þ að1  εÞ 4bh  l2 þ 2agεh
 2  
2 2 Proposition 5. In the scenario of competitive regulation, the optimal
2 4b h  2g2 h  bl 4bh  l
price level of green products and the level of EGTI can be determined to
(48) maximize the economic benefits of green product manufacturing en-
terprises, as follows:
By applying Equations (46)e(48) to Equations (3) and (4), the
market demand for traditional and green products in this scenario
is determined. Similarly, introducing Equations (46)e(48) into 4ðv1 b þ aÞ þ Q0 l  Qg l 5* Q0  Qg
p5*
1 ¼ ; q ¼
Equations (45) and (46) allows the economic benefits of traditional 2pb 4
production enterprises and green product production enterprises
Proof: To maximize the benefits of green product enterprises,
in this scenario to be determined. Introduced into Equation (5),
we construct a Lagrangian objective function, as in Equation (50).
these results determine the amount of waste emissions in the
production process.
2  
Lðp1 ; q; mÞ ¼ ðp1  v1 Þða  bp1 þ lqÞ  f1  hq þ m Q0  4q  Qg
(50)
4.5. Scenario 5: Competitive regulation
By differentiating p1 , q, and m, respectively in the function,
Linear programming is an important branch of operational Equation (51) is obtained.

8 8 4ðv1 b þ aÞ þ Q0 l  Qg l
vL > p5*
>
> a b lq b
>
> 1 ¼
>
> ¼  p 1 þ  ðp1  v1 Þ ¼ 0 >
> 2pb
>
> vp1 >
>
>
> >
>
< < 5* Q0  Qg
vL
¼ lðp1  v1 Þ  2hq  m4 ¼ 0 0 q ¼ 4 (51)
> >
> vq
>
>
>
>
>
>
> vL >
>    
>
> >
> 4bh Q0  Qg þ 4lðv1 b  aÞ  l2 Q0  Qg
: ¼ Q0  4q  Qg ¼ 0 >
:
vm m ¼ 
2p2 b
10 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969

Table 2
Parameters setting.

Parameter name Parameter definition Parameter value

a Potential market demand 800

b Price sensitivity of demand to its price 6
g Cross-price sensitivity 4
ε Degree of customer loyalty to the green products 0.6
l Demand expansion effectiveness coefficient of green products 3
h Cost coefficient of enterprises’ green technology innovation 3
v1 Production cost per unit of green product 16
v2 Production cost per unit of traditional product 15
f1 The fixed production cost of green product 6000
f2 The fixed production cost of traditional product 4000
4 Influence coefficient of GTI on reducing waste emissions 0.05
Q0 Waste emissions per unit of traditional product 10

Table 3
Market equilibrium indicators in different decision scenarios.

Decision scenarios P1 q P2 Q1 Q2

Market deregulation & centralized decision 139.871 61.935 122.081 314.903 147.000
Market deregulation & independent decision 77.994 30.997 66.7340 371.964 231.571
Price regulation & centralized decision 149.548 66.774 120.032 381.161 96.000
Price regulation & independent decision 86.805 35.402 60.3617 424.827 203.048
Competitive regulation decisions 88.002 53.340 - 432.010 -

Therefore, in the scenario of competitive regulation, the optimal
level of EGTI is related only to the emissions of traditional products,
the maximum emissions allowed by the government, and the
impact coefficient of green technological innovation on reducing
waste emissions. The stricter the government’s regulation of the
market, the higher the level of enterprise innovation efforts.
5. Numerical examples
Many factors are involved in this study, and their influence
varies significantly in different scenarios. Hence, this section will
use numerical simulation to verify the correctness of the conclu-
sions above, providing a basis for the subsequent sensitivity anal-
ysis of relevant factors. The specific settings of the model parameter
values are based on the parameter design of Ma et al. (2018)
(Table 2). [Insert Table 2 here]. The parameters are designed not
to represent the actual production situation but to verify the ac-
curacy of the theoretical model and the sensitivity analysis of
related factors.
5.1. System equilibrium
The price of green and traditional products, the market demand
for green and traditional products, and the level of EGTI under the
different scenarios can be determined by introducing the param-
eter values into Propositions 1 to 5 (Table 3). [Insert Table 3 here].
The results show that compared to centralized decision-making
(Scenarios 1 and 3), in the independent decision-making sce-
narios (Scenarios 2 and 4), the market prices of both types of
products are lower. Specifically, in the independent decision-
making scenarios, the market prices of green products are 77.994
and 86.805, respectively, whereas in the centralized decision-
making scenarios, the market prices are 139.871 and 149.548,
respectively. This conclusion also applies to traditional products. In
the independent decision-making scenarios, compared with
centralized decision-making, levels of EGTI fell significantly, from
61.935 to 66.774 to 30.997 and 35.402.
Under the price regulation scenarios (Scenarios 3 and 4), the
level of EGTI, demand for green products, and price of green
products increased, whereas the price of traditional products and
their market demand decreased. Under price regulation, the price
of green products increased from 139.871 to 77.994, respectively, to
149.548 and 86.805; the level of EGTI increased from 61.935 to
30.997 to 66.774 and 35.402; and the demand for green products
increased from 314.903 to 371.964 to 381.161 and 424.827. In
contrast, the price and demand of traditional products both fell.
In the competitive regulation scenario (Scenario 5), the market
demand for green products was greatest, and the level of EGTI was
moderately high; however, the price of green products was
moderately low. Specifically, the market demand for green products
was 432.010, higher than in all the other cases; the level of EGTI was
53.340, ranking third of the five scenarios; and the price of green
products was 88.002, less than in the centralized decision-making
scenarios.
Introducing the values of the above parameters into the corre-
sponding equations, we can determine the total of system waste
emissions, system economic benefits, economic benefits of M1,
economic benefits of M2, and waste emissions per unit of product in

Table 4
Performance indicators in different decision scenarios.

Decision scenarios E PSC PM1 PM2 E/D

Market deregulation & centralized decision 3643.834 33240.200 - - 7.889

Market deregulation & independent decision 5458.864 22157.157 14177.032 7980.130 9.045
Price regulation & centralized decision 3499.034 37610.194 31527.122 6083.072 7.333
Price regulation & independent decision 5526.747 25530.358 20319.674 5210.684 8.802
Competitive regulation decisions 3167.930 16570.000 16570.000 - 7.333
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
Fig. 2. Impact of a on system economic benefits.
Fig. 3. Impact of b on system economic benefits.
Fig. 4. Impact of g on system economic benefits.
the five different scenarios (Table 4). [Insert Table 4 here].
The results show that, compared to independent decision-
making scenarios (Scenarios 2 and 4), waste emissions will
reduce, and economic benefits will increase with centralized
decision-making (Scenarios 1 and 3). Specifically, in the indepen-
dent decision-making scenarios, system waste emissions are
5458.864 and 5526.747, respectively, whereas in the centralized
decision-making scenarios they are 3643.834 and 3499.034. In
terms of system economic performance, in the independent
decision-making scenarios, waste emissions are 22157.157 and
11
Fig. 5. Impact of ε on system economic benefits.
Fig. 6. Impact of l on system economic benefits.
Fig. 7. Impact of h on system economic benefits.
25530.358; in the centralized decision-making scenarios, they are
33240.200 and 37610.194.
In contrast with the price deregulation scenarios, under the
scenarios of price regulation, economic returns will increase. The
impact of price regulation on waste emissions depends on the de-
cision type; that is, under a centralized decision-making scenario,
market regulation will reduce waste emissions, while under an
independent decision-making scenario, price regulation will in-
crease waste emissions. However, irrespective of the type of
decision-making, the introduction of price regulations leads to a
12 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
Fig. 8. Impact of v1 on system economic benefits.
Fig. 9. Impact of v2 on system economic benefits.
Fig. 10. Impact of t1 on system economic benefits.
downward trend in the intensity of waste emissions. Specifically,
under price regulation, the system waste emissions changes from
3499.034 to 5526.747 to 3643.834 and 5458.864; the system eco-
nomic performance increases from 33240.200 to 22157.157 to
37610.194 and 25530.358; and the system energy intensity falls
from 7.889 to 9.045 to 7.333 and 8.802.
In the competitive regulation scenario (Scenario 5), both waste
emissions and economic benefits are minimized. Specifically, the
system waste emissions are 3167.930, smaller than in any of the
other scenarios; the system economic benefits are 16570.000, the
Fig. 11. Impact of t2 on system economic benefits.
lowest value obtained; and the energy intensity is 7.333, equal to
that in the price regulation and centralized decision-making sce-
nario (again, the lowest value obtained).
This system equilibrium analysis is the verification of the
theoretical model analysis. To identify the most critical contradic-
tions, it is also necessary to carry out a sensitivity analysis on the
degree of influence of the strategy adoption of subject and related
factors.
5.2. Sensitivity analysis
Figs. 2e11 show the impact of different exogenous variables on
system economic benefits under the five different scenarios. Sce-
nario 1 represents market deregulation and centralized decision-
making; Scenario 2 represents market deregulation and indepen-
dent decision-making; Scenario 3 represents price regulation and
centralized decision-making; Scenario 4 represents price regula-
tion and independent-making; and Scenario 5 represents
competitive regulation. p represents the system economic benefits.
The following conclusions can be drawn.
First, the system economic benefits in the centralized decision
scenarios are greater than those in the independent decision sce-
narios; they are also greater under the price regulation scenarios
than under the market deregulation scenarios. The system eco-
nomic benefits were minimized under competitive regulation.
Second, potential demand, price sensitivity of demand to alterna-
tive products, degree of customer loyalty to green products, and the
demand expansion effectiveness coefficient of green products have
a positive effect on the system economic benefits, and the marginal
effect of promotion is increasing (Figs. 2 and 4e6). Third, the
product price demand sensitivity coefficient and the cost coeffi-
cient of EGTI are damaging to system economic benefits, with a
diminishing marginal effect (Figs. 3 and 6e7). Fourth, the produc-
tion costs of green products and traditional products are detri-
mental to system economic benefits, with the former having a more
significant impact (Figs. 6 and 8e9). Finally, the intensity of gov-
ernment subsidies to EGTI has a positive effect on system economic
benefits, whereas for traditional product manufacturing enter-
prises it has a negative effect. The former effect is greater than the
latter (Figs. 10 and 11) [Insert Figs. 2e11 here].
Figs. 12e21 show the impact of different exogenous variables on
system waste emissions under the five different scenarios. Scenario
1 represents market deregulation and centralized decision-making;
Scenario 2 represents market deregulation and independent
decision-making; Scenario 3 represents price regulation and
centralized decision-making; Scenario 4 represents price regula-
tion and independent decision-making; Scenario 5 represents
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
Fig. 12. Impact of a on system waste emission.
Fig. 13. Impact of b on system waste emission.
Fig. 14. Impact of g on system waste emission.
competitive regulation. Q represents system waste emissions. We
can draw the following conclusions.
First, system waste emissions under centralized decision-
making are much smaller than under independent decision-
making. System waste emissions under price regulation are also
much smaller than under the market deregulation scenarios, and
smaller again under competitive regulation. Second, both the po-
tential market demand and the cost coefficient of EGTI have a
positive impact on the amount of system waste emissions (Figs. 12
13
Fig. 15. Impact of ε on system waste emission.
Fig. 16. Impact of h on system waste emission.
Fig. 17. Impact of l on system waste emission.
and 16). The degree of customer loyalty to green products and the
prices of green and traditional products have an inhibitory effect on
system waste emissions (Figs. 15 and 18e19). Third, under the
centralized decision-making scenarios, the price sensitivity of de-
mand has the effect of increasing system waste emissions, whereas
under the independent decision-making scenario, the price sensi-
tivity of demand reduces system waste emissions (Fig. 13). Fourth,
under centralized decision-making, cross-price sensitivity and the
demand expansion effectiveness coefficient of green products
14 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
Fig. 18. Impact of v1 on system waste emission.
Fig. 19. Impact of v2 on system waste emission.
Fig. 20. Impact of t1 on system waste emission.
increase system waste emissions (Fig. 14). With independent
decision-making, the price sensitivity of demand has a restraining
effect on system waste emissions (Fig. 17). Finally, in the centralized
decision-making scenarios, the intensity of government subsidy for
EGTI has a restraining effect on system waste emissions. In the
independent decision-making scenarios, the intensity of govern-
ment subsidies increases system waste emissions (Fig. 20).
Regardless of the decision-making type, government regulation of
traditional product manufacturers has a restraining effect on sys-
tem waste emissions (Fig. 21). [Insert Figs. 12e21 here].
Fig. 21. Impact of t2 on system waste emission.
6. Conclusions and discussion
6.1. Discussion
Under price regulation, market demand for green products and
the price of green products increased, whereas the price of tradi-
tional products and their market demand decreased. Under
competitive regulation, market demand for green products was at
its height, whereas product prices were relatively low. These dif-
ferences can be explained in terms of the substantial differences in
policy and in market regulation. Moreover, the role played by the
government in formulating regulatory measures can lead to effects
that are quite different. Such differences are reflected in the variety
of influences on a range of enterprises, as well as on market de-
mand and price. Because of the existence of green technological
innovation, market regulation leads to differences in product de-
mand and price.
Under price regulation, market demand for green products and
the price of green products increased, whereas the price of tradi-
tional products and their market demand decreased. Market reg-
ulations can improve the economic and environmental benefits of
enterprises and systems by encouraging (or forcing) green tech-
nological innovation. Under centralized decision-making, different
types of enterprises can achieve winewin cooperation through
resource sharing. On the one hand, cooperation can reduce pro-
duction costs and improve economic performance; on the other
hand, because of pressure from stakeholders, it can promote the
reduction of waste emissions. Competition regulation can effec-
tively reduce emissions of pollutants, but it also reduces the eco-
nomic benefits of the system by setting an access threshold and
restricting the market access of heavy polluting enterprises.
The system economic benefits in the centralized decision-
making scenarios were greater than those in the independent
decision-making scenarios. The system economic benefits under
price regulation were greater than those under competitive
deregulation, and the system economic benefits in the competitive
regulation scenario were the smallest. Compared with independent
decision-making, centralized decision-making had a positive effect
on improving system economic performance and reducing
pollutant emissions, which is consistent with the cooperative the-
ory. Compared with competition regulation, the setting and
implementation of price regulation was more flexible (which af-
fects both green production enterprises and traditional enter-
prises), and the impact intensity was relatively mild. Therefore,
price regulation has a positive impact on both the environmental
and the economic performance of the system.
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
In the centralized decision-making scenarios, government sub-
sidy to EGTI had a restraining effect on system waste emissions,
whereas in the case of independent decision-making, government
subsidy intensity to EGTI had a greater effect on system waste
emissions. Regardless of the decision-making scenario, govern-
ment regulation on traditional product manufacturers can reduce
system waste emissions. The intention of market regulation is not
to limit the output of traditional products but to guide enterprises
to upgrade technology in ways that reduce waste emissions.
Therefore, subsidies for green production enterprises are better
than regulatory restraints on traditional enterprises. In the
centralized decision-making scenario, market regulation had a
larger audience and brought greater improvements to environ-
mental performance. However, in the independent decision-
making scenario, the audience of market regulation was
restricted to green innovation enterprises, and the improvement in
environmental performance was relatively limited.
6.2. Conclusions
Based on the classic game theory model and the theory of linear
programming, this study has measured the performance of enter-
prises in different scenarios in terms of EGTI and determined the
related influence of exogenous variables on system economic
benefits and waste emissions. From the analysis above, we can
draw four main conclusions.
Different market regulations create great differences in market
demand and product prices. This conclusion is in line with the
findings of Wan (2013), Jian and Heng (2018), and other scholars.
In centralized decision-making scenarios, system waste emis-
sions decreased and system economic benefits increased. Under
price regulation, system economic benefits increased, and the
impact on system waste emissions depended on the type of
decision-making. With the introduction of market regulations,
irrespective of decision type, the intensity of waste emissions
decreased. Under competitive regulation, the system waste emis-
sions and system economic benefits were at their lowest.
Under different scenarios, there is an offset relationship be-
tween system economic benefits and waste emissions. This is
consistent with the findings of Langpap and Shimshack (2010), Jian
and Heng (2018), and other researchers. In the centralized decision-
making scenarios, system waste emissions were lower than in the
independent decision-making scenarios. With price regulation,
system waste emissions were lower than with deregulation, and
under competitive regulation, system waste emissions were lower
still.
Subsidies for EGTI have a positive effect on system economic
benefits, and regulatory pressure on traditional product manufac-
turers is detrimental to system economic returns, but the former
effect is greater than the latter. This is consistent with the findings
of Madani and Rasti-Barzoki (2017), Sinayi and Rasti-Barzoki
(2018), and others.
6.3. Policy implications
In addition to supporting the conclusions discussed above, the
findings have the following policy implications.
Building a beautiful China requires green production and a shift
in lifestyle from the pursuit of speed to the pursuit of quality. The
construction of the market-oriented green technological innova-
tion system proposed in the report on the 19th National Congress of
China is an endogenous driving force for achieving high-quality
development. However, multiple externalities and uncertainties
dampen investment enthusiasm for EGTI, which therefore requires
appropriate government regulations. Greater efficiency in the
15
allocation of innovative sources determines the advantages of
market-based regulations in improving performance. In short,
government market regulations can affect EGTI, leading to in-
creases in the economic and environmental benefits of the inno-
vation subjects and the system.
As different regulations have different impacts, it is necessary to
carry out pilot evaluations of the impact of market regulation on
EGTI performance for a specific region, industry, and type of en-
terprise. When formulating industrial and regional planning, the
relevant administrative departments for green technological
innovation at all levels should consider the current situation and
development requirements, formulate corresponding measures to
support green technology and industrial development simulta-
neously, and further clarify the development direction, structural
layout, and key tasks of the industry and local green technology.
In terms of the relationship between economic benefits and
waste emissions, it is essential to adjust the degree of focus
dynamically. When evaluating system performance, the weighting
of environmental performance and economic performance should
be adjusted according to the stage of regional economic and social
development. For example, in the early stages of industrialization,
more attention should be paid to economic performance; in the
period of ecological civilization construction, environmental per-
formance should be prioritized. All regions should summarize their
experience in management practice, continuously upgrading their
knowledge and making it possible for other areas and industries to
absorb that experience and knowledge. It should also be noted that
there is a conversion relationship between environmental perfor-
mance and economic performance; that is, green mountains and
clear water can be transformed into mountains of gold and silver.
At the stage of high-quality development, it is important to keep
increasing the proportion of environmental performance within
system innovation performance. A one-vote veto system for envi-
ronmental performance should be established, with an emphasis
on evaluating economic performance in light of environmental
performance. Linking the two types of performance with the price
formation mechanism of ecological products, along with the inte-
gration of green price policies such as carbon emissions trading and
green certificate trading systems, will achieve a rapid trans-
formation of environmental performance into economic perfor-
mance. Green technological innovation achievements should be
taken as an essential indicator of high-quality development and
incorporated into the evaluation mechanism for ecological civili-
zation construction and innovation development.
Despite these attempts to study the relationships among green
technological innovation, market regulations, and innovation per-
formance, gaps and limitations remain. In terms of model con-
struction, the profit function of the game subject needs to be
improved. Moreover, the characteristics of the enterprises have not
yet been included in the model construction and analysis; this is an
important limitation, as the ownership and scale of an enterprise is
likely to have a substantial impact on decision-making and on the
benefits of green technological innovation. Finally, considering the
impact of the uncertainty of innovation performance is also an
important direction for future research.
CRediT authorship contribution statement
Mingyue Wang: Methodology, Software, Formal analysis,
Writing - original draft. Zhixuan Cheng: Methodology, Formal
analysis, Validation. Yingming Li: Conceptualization, Methodology,
Formal analysis, Supervision, Writing - review & editing. Junqiang
Li: Data curation, Investigation. Kaixuan Guan: Data curation,
Investigation.
16 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969
Declaration of competing interest
The authors declare that they have no known competing
financial interests or personal relationships that could have
appeared to influence the work reported in this paper.
Acknowledgments
This study is supported by the Project funded by China Post-
doctoral Science Foundation (Grant number 2020M670470), Spe-
cial Development and Reform Program of the Ministry of Science
and Technology, China (Grant number 2018.3-2019.12).
References
Aldieri, L., Carlucci, F., Cira , A., Ioppolo, G., Vinci, C.P., 2019. Is green innovation an
opportunity or a threat to employment? An empirical analysis of three main
industrialized areas: the USA, Japan and Europe. J. Clean. Prod. 214, 758e766.
https://doi.org/10.1016/j.jclepro.2019.01.016.
Barbieri, N., Marzucchi, A., Rizzo, U., 2020. Knowledge sources and impacts on
subsequent inventions: Do green technologies differ from non-green ones? Res.
Pol. 49, 103901. https://doi.org/10.1016/j.respol.2019.103901.
Cai, W., Li, G., 2018. The drivers of eco-innovation and its impact on performance:
evidence from China. J. Clean. Prod. 176, 110e118. https://doi.org/10.1016/
j.jclepro.2017.12.109.
Chakraborty, P., Chatterjee, C., 2017. Does environmental regulation indirectly
induce upstream innovation? New evidence from India. Res. Pol. 46, 939e955.
https://doi.org/10.1016/j.respol.2017.03.004.
Ch avez, C.A., Villena, M.G., Stranlund, J.K., 2009. The choice of policy instruments to
control pollution under costly enforcement and incomplete information. J. Appl.
Econ. 12, 207e227. https://doi.org/10.1016/S1514-0326(09)60013-1.
Chegut, A., Eichholtz, P., Kok, N., 2019. The price of innovation: an analysis of the
marginal cost of green buildings. J. Environ. Econ. Manag. 98, 102248 https://
doi.org/10.1016/j.jeem.2019.07.003.
Doran, J., Ryan, G., 2012. Regulation and firm perception, eco-innovation and firm
performance regulation and firm perception, Eco-innovation and firm perfor-
mance. MPRA Pap 15, 421e441.
Dost, M., Pahi, M.H., Magsi, H.B., Umrani, W.A., 2019. Influence of the best practices
of environmental management on green product development. J. Environ.
Manag. 241, 219e225. https://doi.org/10.1016/j.jenvman.2019.04.006.
Fagerberg, J., 2018. Mobilizing innovation for sustainability transitions: a comment
on transformative innovation policy. Res. Pol. 47, 1568e1576. https://doi.org/
10.1016/j.respol.2018.08.012.
Fernando, Y., Wah, W.X., 2017. The impact of eco-innovation drivers on environ-
mental performance: empirical results from the green technology sector in
Malaysia. Sustain. Prod. Consum. 12, 27e43. https://doi.org/10.1016/
j.spc.2017.05.002.
Hafezalkotob, A., 2018. Modelling intervention policies of government in price-
energy saving competition of green supply chains. Comput. Ind. Eng. 119,
247e261. https://doi.org/10.1016/j.cie.2018.03.031.
Hamamoto, M., 2006. Environmental regulation and the productivity of Japanese
manufacturing industries. Resour. Energy Econ. 28, 0e312.
Hazarika, N., Zhang, X., 2019. Evolving theories of eco-innovation: a systematic
review. Sustain. Prod. Consum. 19, 64e78. https://doi.org/10.1016/
j.spc.2019.03.002.
He, F., Miao, X., Wong, C.W.Y., Lee, S., 2018. Contemporary corporate eco-innovation
research: a systematic review. J. Clean. Prod. 174, 502e526. https://doi.org/
10.1016/j.jclepro.2017.10.314.
Javier Aguilera-Caracuel, N.O.-M., 2013. Green innovation and financial perfor-
mance: an institutional approach. Organ. Environ. 26, 365e385.
Jian, H., Heng, C., 2018. Research on the green technological innovation perfor-
mance and driving factors of high patent-intensive manufacturers in China.
Manag. Rev. 30, 59e69.
Jiao, J., Chen, C., Bai, Y., 2020. Is green technology vertical spillovers more significant
in mitigating carbon intensity? Evidence from Chinese industries. J. Clean. Prod.
257, 120354 https://doi.org/10.1016/j.jclepro.2020.120354.
Langpap, C., Shimshack, J.P., 2010. Private citizen suits and public enforcement:
Substitutes or complements? J. Environ. Econ. Manag. 59, 235e249. https://
doi.org/10.1016/j.jeem.2010.01.001.
Li, D., Zheng, M., Cao, C., Chen, X., Ren, S., Huang, M., 2017. The impact of legitimacy
pressure and corporate profitability on green innovation: evidence from China
top 100. J. Clean. Prod. 141, 41e49. https://doi.org/10.1016/j.jclepro.2016.08.123.
Li, T., Li, Y., An, D., Han, Y., Xu, S., Lu, Z., Crittenden, J., 2019. Mining of the association
rules between industrialization level and air quality to inform high-quality
development in China. J. Environ. Manag. 246, 564e574. https://doi.org/
10.1016/j.jenvman.2019.06.022.
Li, Z., Liao, G., Wang, Z., Huang, Z., 2018. Green loan and subsidy for promoting clean
production innovation. J. Clean. Prod. 187, 421e431. https://doi.org/10.1016/
j.jclepro.2018.03.066.
Lin, B., Chen, Y., 2019. Does electricity price matter for innovation in renewable
energy technologies in China ? Energy Econ. 78, 259e266. https://doi.org/
10.1016/j.eneco.2018.11.014.
Liu, Z., Li, X., Peng, X., Lee, S., 2019. Green or nongreen innovation? Different stra-
tegic preferences among subsidized enterprises with different ownership types.
J. Clean. Prod. https://doi.org/10.1016/j.jclepro.2019.118786.
Ma, P., Zhang, C., Hong, X., Xu, H., 2018. Pricing decisions for substitutable products
with green manufacturing in a competitive supply chain. J. Clean. Prod. 183,
618e640. https://doi.org/10.1016/j.jclepro.2018.02.152.
Madani, S.R., Rasti-Barzoki, M., 2017. Sustainable supply chain management with
pricing, greening and governmental tariffs determining strategies: a game-
theoretic approach. Comput. Ind. Eng. 105, 287e298. https://doi.org/10.1016/
j.cie.2017.01.017.
Martínez-Zarzoso, I., Bengochea-Morancho, A., Morales-Lage, R., 2019. Does envi-
ronmental policy stringency foster innovation and productivity in OECD
countries? Energy Pol. 134, 110982 https://doi.org/10.1016/j.enpol.2019.110982.
OECD, 2011. Fostering innovation for green growth. Source OECD Environ. Sustain.
Dev. 108e119.
Rainville, A., 2017. Standards in green public procurement e a framework to
enhance innovation. J. Clean. Prod. 167, 1029e1037. https://doi.org/10.1016/
j.jclepro.2016.10.088.
Ramanathan, R., He, Q., Black, A., Ghobadian, A., Gallear, D., 2017. Environmental
regulations, innovation and firm performance: a revisit of the Porter hypoth-
esis. J. Clean. Prod. 155, 79e92. https://doi.org/10.1016/j.jclepro.2016.08.116.
Ren, S., Li, X., Yuan, B., Li, D., Chen, X., 2018. The effects of three types of environ-
mental regulation on eco-efficiency: a cross-region analysis in China. J. Clean.
Prod. 173, 245e255. https://doi.org/10.1016/j.jclepro.2016.08.113.
Ritzenhofen, I., Birge, J.R., Spinler, S., 2016. The structural impact of renewable
portfolio standards and feed-in tariffs on electricity markets. Eur. J. Oper. Res.
255, 224e242. https://doi.org/10.1016/j.ejor.2016.04.061.
Salim, N., Ab Rahman, M.N., Abd Wahab, D., 2019. A systematic literature review of
internal capabilities for enhancing eco-innovation performance of
manufacturing firms. J. Clean. Prod. 209, 1445e1460. https://doi.org/10.1016/
j.jclepro.2018.11.105.
Schot, J., Steinmueller, W.E., 2018. Three frames for innovation policy: R&D, systems
of innovation and transformative change. Res. Pol. 47, 1554e1567. https://
doi.org/10.1016/j.respol.2018.08.011.

, D.M., 2019. Innovations for sustainable development: Moving
Silvestre, B.S., Ţîrca
toward a sustainable future. J. Clean. Prod. 208, 325e332. https://doi.org/
10.1016/j.jclepro.2018.09.244.
Sinayi, M., Rasti-Barzoki, M., 2018. A game theoretic approach for pricing, greening,
and social welfare policies in a supply chain with government intervention.
J. Clean. Prod. 196, 1443e1458. https://doi.org/10.1016/j.jclepro.2018.05.212.
Stucki, T., 2019. What hampers green product innovation: the effect of experience.
Ind. Innovat. 26, 1242e1270. https://doi.org/10.1080/13662716.2019.1611417.
€belmann, D., Wendler, T., 2020. The impact of environmental innovation on
To
carbon dioxide emissions. J. Clean. Prod. 244 https://doi.org/10.1016/
j.jclepro.2019.118787.
Triguero, A., Moreno-Monde jar, L., Davia, M.A., 2013. Drivers of different types of
eco-innovation in European SMEs. Ecol. Econ. 92, 25e33. https://doi.org/
10.1016/j.ecolecon.2013.04.009.
Uppenberg, K., 2009. Innovation and Economic Growth. Springer.
Wan, J.X., 2013. Retest on Porter hypothesis based on environmental policy regu-
lation performanceda key industrial survey in Jiangxi Province. Econ. Surv. 1,
115e119.
Wang, C., Nie, P. yan, Peng, D. heng, Li, Z. hui, 2017. Green insurance subsidy for
promoting clean production innovation. J. Clean. Prod. 148, 111e117. https://
doi.org/10.1016/j.jclepro.2017.01.145.
Wang, H., 2002. Pollution regulation and abatement efforts: evidence from China.
Ecol. Econ. 41, 85e94. https://doi.org/10.1016/S0921-8009(02)00016-2.
Wang, H., Wheeler, D., 2005. Financial incentives and endogenous enforcement in
China’s pollution levy system. J. Environ. Econ. Manag. 49, 174e196. https://
doi.org/10.1016/j.jeem.2004.02.004.
Wang, J.R.Z.Y., 2018. Environmental regulation, green technological innovative
intention and green technological innovative behavior. Stud. Sci. Sci. 352e360.
Wang, M., Li, Y., Li, M., Shi, W., Quan, S., 2019. Will carbon tax affect the strategy and
performance of low-carbon technology sharing between enterprises? J. Clean.
Prod. 210, 724e737. https://doi.org/10.1016/j.jclepro.2018.10.321.
Xia, D., Chen, B., Zheng, Z., 2015. Relationships among circumstance pressure, green
technology selection and firm performance. J. Clean. Prod. 106, 487e496.
https://doi.org/10.1016/j.jclepro.2014.11.081.
Xia, D., Zhang, M., Yu, Q., Tu, Y., 2019. Developing a framework to identify barriers of
Green technology adoption for enterprises. Resour. Conserv. Recycl. 143,
99e110. https://doi.org/10.1016/j.resconrec.2018.12.022.
Xu, W., Xu, C.H.U., Fei, W., 2018. Green technology innovation and enterprises’
optimal dynamic configuration of financing contractsdan empirical study
based on panel data of the listed high-tech manufacturing companies. R D
Manag.
 M. Wang et al. / Journal of Cleaner Production 277 (2020) 123969 17

Yang, G., Maskus, K.E., 2001. Intellectual property rights, licensing, and innovation
in an endogenous product-cycle model. J. Int. Econ. 53, 169e187. https://
doi.org/10.1016/S0022-1996(00)00062-3.
Zhang, Q., Tang, W., Zhang, J., 2016. Green supply chain performance with cost
learning and operational inefficiency effects. J. Clean. Prod. 112, 3267e3284.
https://doi.org/10.1016/j.jclepro.2015.10.069.
Zhao, S., Jiang, Y., Wang, S., 2019. Innovation stages, knowledge spillover, and green
economy development: moderating role of absorptive capacity and environ-
mental regulation. Environ. Sci. Pollut. Res. 26, 25312e25325. https://doi.org/
10.1007/s11356-019-05777-9.
Zhou, Y., Hu, F., Zhou, Z., 2018. Pricing decisions and social welfare in a supply chain
with multiple competing retailers and carbon tax policy. J. Clean. Prod. 190,
752e777. https://doi.org/10.1016/j.jclepro.2018.04.162.