Green Packaging or Greenwashing? Implications of Bring-Your-Own-Container

41 Pages Posted: 23 Jul 2021

See all articles by Yunlong Peng

Yunlong Peng

Tsinghua University - School of Economics & Management

Fei Gao

Indiana University Bloomington

Jian Chen

Tsinghua University - School of Economics and Management

Date Written: July 16, 2021

Abstract

Greenwashing, which is defined as the intersection of a firm's poor environmental performance and positive communication about its environmental performance, is a common phenomenon in the green packaging market. Bring-your-own-container (BYOC), becomes a growing eco-trend among eco-conscious consumers, where consumers use their own reusable container instead of the disposable packaging offered by the firm to buy and consume products. In this paper, we develop a stylized model to examine the impacts of BYOC on a firm's packaging and communication decisions. We further study the profit and environmental implications if greenwashing is stopped (e.g., by credible third-party certifications or government regulations). Our main results follow. First, when some consumers start using their own reusable container, demand for the firm-offered green disposable packaging is expected to decrease, but a profit-maximizing firm might paradoxically spend more efforts creating a green image of its product packaging, either by adopting green packaging or even engaging in greenwashing. Second, it could be profitable for a firm to adopt an unverifiable self-label rather than a credible third-party certification to disclose the green quality of its product packaging, even if the latter is costless. Finally, it might not always be wise for the government to regulate greenwashing, since it could cause a negative impact on the environment given the BYOC trend.

Keywords: green packaging, greenwashing, sustainable operations, game theory

Suggested Citation

Peng, Yunlong and Gao, Fei and Chen, Jian, Green Packaging or Greenwashing? Implications of Bring-Your-Own-Container (July 16, 2021). Kelley School of Business Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3888378 or http://dx.doi.org/10.2139/ssrn.3888378

Yunlong Peng

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Fei Gao (Contact Author)

Indiana University Bloomington ( email )

1309 E 10th St
Bloomington, IN 47405
United States

Jian Chen

Tsinghua University - School of Economics and Management ( email )

Beijing, 100084
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
90
Abstract Views
381
rank
348,829
PlumX Metrics