When does it pay off to integrate sustainability in the business model? – A game-theoretic analysis

Abstract

Acknowledging sustainability as a challenge of utmost importance, organizations face questions on dealing with different dimensions of sustainability. Respective actions include a fundamental shift in the purpose of business and almost every aspect of how it is conducted, or in short: an integration of sustainability in organizations’ business model. However, as sustainability is no altruistic end in itself, respective transformation must resonate with organizations’ economic conditions and their position in the market. But when does it pay off for organizations to integrate sustainability in their business model? Within this research paper we find answers by applying a game-theoretic framework and examining competition strategies for organizations integrating sustainability in their business model. Hereby we consider different market scenarios where symmetric and asymmetric, weak and strong, as well as a varying number of organizations interact. Our results suggest different strategies organizations can apply to gain competitive advantage.

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Notes

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    Please note: According to our description of BMfS, the “level of sustainability” either refers to a situation where organizations fully integrated sustainability (maximum level) in their business model or only did so in parts. Whereas in the first case, social and environmental goals are coequal to the goal of creating economic performance, they are subordinated to certain extents in the latter case.

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Correspondence to Valerie Graf-Drasch.

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Gimpel, H., Graf-Drasch, V., Kammerer, A. et al. When does it pay off to integrate sustainability in the business model? – A game-theoretic analysis. Electron Markets 30, 699–716 (2020). https://doi.org/10.1007/s12525-019-00361-y

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Keywords

  • Sustainability
  • Sustainability business model
  • Game theory;

JEL classification

  • D440