Title

An Analysis of Firms" Sustainable Operations Strategies: A Game Theory Approach

Document Type

Article

Publication Date

2015

Abstract

Environmental sustainability is receiving increasing attention in industries and is manifested in various dimensions such as marketing and operations. Incorporating sustainability in operations is a strategic decision that has challenged most firms in recent years. Social trends and government regulations are important factors that play a role in influencing firms’ decisions to adopt an environmentally sustainable strategy in their operations. In this paper, we develop a game theory model to mathematically analyze how these two factors can change a firm’s decision from a non-sustainable to a sustainable strategy, and vice versa. We demonstrate that the model is not limited to the ‘prisoner’s dilemma’ but also includes the games of ‘harmony’ and ‘no-conflict’. This model helps explain firms’ past sustainability behaviour and enables us to predict their future actions.

Publication Name

International Journal of Operations Management

Volume Number

5

First Page

1

Last Page

12

Issue Number

1

DOI

http://dx.doi.org/10.1504/IJMOM.2015.069220