Package-type strategies and packaging's carbon reduction decisions in the take-out industry

Abstract

Using environmentally friendly packaging (E-packaging) instead of non-environmentally friendly packaging (N-packaging) can mitigate pollution and reduce carbon emissions. However, the market penetration rate of E-packaging is low, and the packaging carbon reduction level is uneven. This study uses game theory models to examine the factors affecting packaging carbon reduction levels and fees as well as firms' package-type decisions. First, we obtain the optimal solutions for packaging manufacturers and firms when they use different types of packaging under monopoly and competition, respectively. We find that green competition reduces the carbon reduction level of E-packaging, whereas price competition can increase it under certain conditions. The unit manufacturing cost of N-packaging and cost coefficient of carbon reduction are critical considerations for package-type decisions. When the unit manufacturing cost of N-packaging is low and the cost coefficient is large, no firm uses E-packaging. We also demonstrate that firms in a competitive market may become trapped in a prisoner's dilemma after making package-type decisions. Interestingly, we show that the firms' package-type decisions can hurt consumers and welfare under certain conditions, depending on the N-packaging's unit manufacturing cost and pollution damage factor. Our findings provide insights for packaging manufacturers, firms, and environmental regulatory agencies, and can help promote E-packaging.

Keywords:

• Carbon reduction
• package-type decision
• game theory
• competition
• green investment

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data Availability Statement

We conducted this study through game theory models. No data were generated or used during the study.

Notes

1 The packaging's functionality is reflected in the impact on the product taste. The packaging's primary function is to protect the product and maintain its quality or taste. Take-out food has high requirements for packaging functionality. In the case of noodle soup, the packaging needs to maintain the temperature of the food and keep the noodles and soup separated. If the packaging cannot meet this functionality level, the product's taste will decline. Then, food packaging can affect consumers' perception of product taste. For example, when Coca-Cola changed its world-famous red packaging to a white pack containing a white polar bear, customers complained that the drink tasted different, and wine and beer specialists argued that packaging different beverages in different bottles can affect their flavor (KLBD 2016).

2 Since $t⩾{\underset{\_}{t}}^M$ is the essential constraint of this study, we omit the description of $t⩾{\underset{\_}{t}}^M$ when explaining our findings for simplification.

Additional information

Funding

Our research was supported by National Natural Science Foundation of China (Grant Nos. 72071193, 71971201, 72188101, 72271078), National Social Science Fund of China (No. 21&ZD129), Top-Notch Young Talents Program of China, the Fundamental Research Funds for the Central Universities (Grant Nos. KY2040000049, WK2040000027). The authors also would like to thank the Young Taishan Scholars Program of Shandong Province (No. tsqn202103024) and the Qilu Young Scholars of Shandong University for financial support.

Notes on contributors

Shaofu Du

Shaofu Du is a professor at the School of Management, University of Science and Technology of China, Hefei, P. R. China. His research interests include supply chain management, game theory, crowdfunding, behavioural operations, and low-carbon operations management. Dr. Du has published in European Journal of Operational Research, International Journal of Production Research, Transportation Research Part E: Logistics and Transportation Review, Decision Support Systems, Annals of Operations Research, International Journal of Production Economics, Omega, and other journals.

Minjian Liu

Minjian Liu is a Ph.D. candidate at the School of Management, University of Science and Technology of China. Hefei, P. R. China. Her research interests include game theory, green supply chain management, and platform operations.

Tengfei Nie

Tengfei Nie is a professor at the School of Management, Shandong University, Jinan, P. R. China. His research interests include supply chain management, game theory, behavioural operations management, crowdfunding, and co-creation. Dr. Nie has published in European Journal of Operational Research, International Journal of Production Research, Omega, Decision Support Systems, Annals of Operations Research, Computers & Industrial Engineering, and other journals.

Yangguang Zhu

Yangguang Zhu is a lecturer at the School of Economics, Hefei University of Technology, Hefei, P. R. China. Her research interests include financial risk management, financial crisis contagion studies, and supply chain finance. Dr. Zhu has published in International Journal of Production Research, Transportation Research Part E: Logistics and Transportation Review, Annals of Operations Research, International Transactions in Operational Research, and other journals.