Effects of rival whistle-blowing on green product innovation

Green product innovation focused on environment and consumers benefits is increasing becoming an efficient sustainable strategy for firm and supply chain. Consumer can pay substantial premium for green innovative product, greenness itself is not a well-defined concept, and detecting violation of green innovation is very difficulty for consumer and government, all these induce free rider and green deceptive marketing behavior of firm. We study effects of rival whistle-blowing on green product innovation. We find that from maintaining market share perspective, the optimal decision for firm is to accept the violation of green innovation report from competitor, whereas from short term expected profits perspective, whether firm accepts violation report depends on bargain power of transfer payment between competitor and firm. But from long term sustainable perspective, firm should improve quality of green innovation rather than green deceptive marketing.