{"title":"Modeling green reputation decisions in a nonlinear Cournot duopoly of carbon emission abatement","authors":"Xiaoliang Li , Shuie Sun , Ally Quan Zhang","doi":"10.1016/j.econmod.2025.107215","DOIUrl":null,"url":null,"abstract":"<div><div>In response to consumer environmental awareness and carbon taxation, we develop a nonlinear Cournot duopoly model to examine how firms make green reputation decisions. Using symbolic computation methods, we analyze equilibrium strategies in both static and dynamic settings. Our results show that a firm’s emission abatement effort increases with its basic production cost, green efficiency, and carbon tax rate. Under nonlinear demand, less productive firms may exert greater effort to improve their green reputation, a phenomenon not observed under linear demand. Numerical simulations also show that excessive carbon taxes or low green efficiency can disrupt market equilibrium. Our study offers policymakers and business practitioners practical insights into how regulatory incentives and consumer preferences shape firms’ green strategies. The proposed framework supports the development of environmental policies that foster green transformation and support long-term market stability.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"151 ","pages":"Article 107215"},"PeriodicalIF":4.2000,"publicationDate":"2025-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Modelling","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S026499932500210X","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
In response to consumer environmental awareness and carbon taxation, we develop a nonlinear Cournot duopoly model to examine how firms make green reputation decisions. Using symbolic computation methods, we analyze equilibrium strategies in both static and dynamic settings. Our results show that a firm’s emission abatement effort increases with its basic production cost, green efficiency, and carbon tax rate. Under nonlinear demand, less productive firms may exert greater effort to improve their green reputation, a phenomenon not observed under linear demand. Numerical simulations also show that excessive carbon taxes or low green efficiency can disrupt market equilibrium. Our study offers policymakers and business practitioners practical insights into how regulatory incentives and consumer preferences shape firms’ green strategies. The proposed framework supports the development of environmental policies that foster green transformation and support long-term market stability.
期刊介绍:
Economic Modelling fills a major gap in the economics literature, providing a single source of both theoretical and applied papers on economic modelling. The journal prime objective is to provide an international review of the state-of-the-art in economic modelling. Economic Modelling publishes the complete versions of many large-scale models of industrially advanced economies which have been developed for policy analysis. Examples are the Bank of England Model and the US Federal Reserve Board Model which had hitherto been unpublished. As individual models are revised and updated, the journal publishes subsequent papers dealing with these revisions, so keeping its readers as up to date as possible.