INFORMS 2022, Indiana, United States Of America, 16 - 19 October 2022, pp.1
We investigate the strategic interaction between a buyer and two suppliers in a supply chain with a game-theoretical model. The buyer and tier-1 supplier are environmentally sustainable and want to improve the environmental image of products with the improvement in the tier-2 supplier’s environmental quality to enhance demand by benefiting from the environmental consciousness of the consumers. To achieve that, either one of the downstream players offers to share the investment cost of the tier-2 supplier and the buyer advertises the product’s environmental quality. When the advertised quality exceeds the true quality, this excess is called greenwashing. If greenwashing is exposed, consumers punish the supply chain by not buying the product.