Green product pricing with non-green product reference

This study investigates a green-product pricing problem by taking into account consumer environmental awareness (CEA) and non-green (regular) product reference. The pricing strategies under three scenarios are investigated: single-product pricing; dual-product competition; and asymmetric-information case. The analytical results show that differential pricing strategies should be adopted, facing consumers with differential purchase behaviors (i.e., differential levels of CEA and reference recognition). The green product's pricing strategy is significantly affected by asymmetric information. In contrast to the case of symmetric information, the firm should adopt distinguished pricing strategies in consideration of its green production cost.