{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,3,24]],"date-time":"2026-03-24T19:21:08Z","timestamp":1774380068469,"version":"3.50.1"},"reference-count":32,"publisher":"MDPI AG","issue":"3","license":[{"start":{"date-parts":[[2021,9,16]],"date-time":"2021-09-16T00:00:00Z","timestamp":1631750400000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Games"],"abstract":"<jats:p>The present paper provides theoretical insights regarding the determinants of firms\u2019 incentives to invest in a Circular Economy. The analysis relies on a Cournot model disaggregating the disposal cost in the production function. In a non-simultaneous sequential game, two risk-neutral firms are endowed with a green innovation project that, if successful, would reduce the overall production costs and implement a Circular Economy. Firms are plagued by asymmetric information about the exact value of the other firm\u2019s innovation. In this setting, the R&amp;D investment in a Circular Economy, by affecting the distribution of production and disposal costs, influences the production decisions of both the innovating and the rival firms. The sign of the impact depends on the firms\u2019 strategy in the product market. Furthermore, the analysis points out that cooperation in R&amp;D of firms competing in the product market reinforces incentives to invest in green innovation. This suggests that governments aimed to advance a Circular Economy should encourage firms\u2019 cooperation.<\/jats:p>","DOI":"10.3390\/g12030068","type":"journal-article","created":{"date-parts":[[2021,9,22]],"date-time":"2021-09-22T03:47:35Z","timestamp":1632282455000},"page":"68","update-policy":"https:\/\/doi.org\/10.3390\/mdpi_crossmark_policy","source":"Crossref","is-referenced-by-count":22,"title":["Green Innovation and Competition: R&amp;D Incentives in a Circular Economy"],"prefix":"10.3390","volume":"12","author":[{"ORCID":"https:\/\/orcid.org\/0000-0003-0205-2704","authenticated-orcid":false,"given":"Giovanna","family":"Bimonte","sequence":"first","affiliation":[{"name":"Department of Economics and Statistics, University of Salerno, Via Giovanni Paolo II, 132, I-84084 Fisciano, Italy"}]},{"ORCID":"https:\/\/orcid.org\/0000-0001-6463-5388","authenticated-orcid":false,"given":"Maria Grazia","family":"Romano","sequence":"additional","affiliation":[{"name":"Department of Economics and Statistics, University of Salerno, Via Giovanni Paolo II, 132, I-84084 Fisciano, Italy"},{"name":"Department of Economics and Statistics and CSEF, University of Naples Federico II, Via Cintia, Monte S. Angelo, I-80126 Napoli, Italy"}]},{"ORCID":"https:\/\/orcid.org\/0000-0001-9455-7085","authenticated-orcid":false,"given":"Maria","family":"Russolillo","sequence":"additional","affiliation":[{"name":"Department of Economics and Statistics, University of Salerno, Via Giovanni Paolo II, 132, I-84084 Fisciano, Italy"},{"name":"Faculty of Actuarial Science and Insurance, Bayes Business School, City University, 106 Bunhill Row, London EC1Y 8TZ, UK"}]}],"member":"1968","published-online":{"date-parts":[[2021,9,16]]},"reference":[{"key":"ref_1","first-page":"239","article-title":"Strategies for manufacturing","volume":"10","author":"Frosch","year":"1989","journal-title":"J. Ind. Ecol."},{"key":"ref_2","doi-asserted-by":"crossref","first-page":"757","DOI":"10.1016\/j.jclepro.2016.12.048","article-title":"The Circular Economy\u2014A new sustainability paradigm?","volume":"143","author":"Geissdoerfer","year":"2017","journal-title":"J. Clean. Prod."},{"key":"ref_3","unstructured":"OECD (2009). Sustainable Manufacturing and Eco-Innovation: Towards a Green Economy, OECD."},{"key":"ref_4","doi-asserted-by":"crossref","first-page":"264","DOI":"10.1016\/j.ecolecon.2018.04.028","article-title":"Barriers to the circular economy: Evidence from the European Union (EU)","volume":"150","author":"Kirchherr","year":"2018","journal-title":"Ecol. Econ."},{"key":"ref_5","first-page":"144","article-title":"Industrial symbiosis in Kalundborg Denmark: A quantitative assessment of economic and environmental aspects","volume":"261","author":"Jacobsen","year":"2006","journal-title":"Sci. Am."},{"key":"ref_6","unstructured":"Andersen, M.S., and Jorgensen, U. (1997). Evaluation of the Cleaner Technology Programme 1987\u20131992: Results, Diffusion and Future Activities; Environmental Review, No. 14, Danish Environmental Protection Agency."},{"key":"ref_7","doi-asserted-by":"crossref","first-page":"39","DOI":"10.1007\/BF03353902","article-title":"Governance by green taxes: Implementing clean water policies in Europe 1970\u20131990","volume":"2","author":"Andersen","year":"1999","journal-title":"Environ. Econ. Policy Stud."},{"key":"ref_8","doi-asserted-by":"crossref","first-page":"133","DOI":"10.1007\/s11625-006-0013-6","article-title":"An introductory note on the environmental economics of the circular economy","volume":"2","author":"Andersen","year":"2007","journal-title":"Sustain. Sci."},{"key":"ref_9","unstructured":"Schumpeter, J.A. (1934). The Theory of Economic Development, Harvard University Press."},{"key":"ref_10","unstructured":"Schumpeter, J.A. (1942). Capitalism, Socialism, and Democracy, Harper & Brothers."},{"key":"ref_11","doi-asserted-by":"crossref","first-page":"11","DOI":"10.1016\/j.ecolecon.2018.12.012","article-title":"The circular economy: Swings and roundabouts?","volume":"158","author":"Millar","year":"2019","journal-title":"Ecol. Econ."},{"key":"ref_12","doi-asserted-by":"crossref","unstructured":"Meidute-Kavaliauskiene, I., \u00c7i\u01e7dem, \u015e., Vasilis Vasiliauskas, A., and Yildiz, B. (2021). Green Innovation in Environmental Complexity: The Implication of Open Innovation. J. Open Innov. Technol. Mark. Complex., 7.","DOI":"10.3390\/joitmc7020107"},{"key":"ref_13","doi-asserted-by":"crossref","unstructured":"Cella, M., and Etro, F. (2010). Oligopolistic Screening and Two-Way Distortion, Department of Economics, University Ca\u2019Foscari of Venice. Working Papers No. 2010_28.","DOI":"10.2139\/ssrn.1738920"},{"key":"ref_14","doi-asserted-by":"crossref","first-page":"488","DOI":"10.1111\/jems.12021","article-title":"Equilibrium Principal-Agent Contracts: Competition and R&D Incentives","volume":"22","author":"Cella","year":"2013","journal-title":"J. Econ. Manag. Strategy"},{"key":"ref_15","doi-asserted-by":"crossref","first-page":"105","DOI":"10.1016\/0304-405X(94)00816-J","article-title":"Executive Pay and Performance Evidence from the U.S. Banking Industry","volume":"29","author":"Hubbard","year":"1995","journal-title":"J. Financ. Econ."},{"key":"ref_16","doi-asserted-by":"crossref","first-page":"1058","DOI":"10.1162\/1542476054729437","article-title":"How Does Product Market Competition Shape Incentive Contracts?","volume":"3","author":"Guadalupe","year":"2005","journal-title":"J. Eur. Econ. Assoc."},{"key":"ref_17","doi-asserted-by":"crossref","first-page":"1351","DOI":"10.1162\/qjec.2007.122.4.1351","article-title":"Measuring and Explaining Management Practices Across Firms and Nations","volume":"122","author":"Bloom","year":"2007","journal-title":"Q. J. Econ."},{"key":"ref_18","doi-asserted-by":"crossref","first-page":"116","DOI":"10.1016\/j.eneco.2017.09.022","article-title":"Cournot competition and \u201cgreen\u201d innovation: An inverted-U relationship","volume":"68","author":"Lambertini","year":"2017","journal-title":"Energy Econ."},{"key":"ref_19","first-page":"701","article-title":"Competition and innovation: An inverted-U relationship","volume":"120","author":"Aghion","year":"2005","journal-title":"Q. J. Econ."},{"key":"ref_20","doi-asserted-by":"crossref","unstructured":"Tylecote, A., and Visintin, F. (2007). Corporate Governance, Finance and the Technological Advantage of Nations, Routledge.","DOI":"10.4324\/9780203933886"},{"key":"ref_21","doi-asserted-by":"crossref","first-page":"828","DOI":"10.1111\/j.1467-8683.2007.00622.x","article-title":"Do the type and number of blockholders influence R&D investments? New evidence from Spain","volume":"15","author":"Tribo","year":"2007","journal-title":"Corp. Gov. Int. Rev."},{"key":"ref_22","doi-asserted-by":"crossref","first-page":"77","DOI":"10.1111\/j.1467-8683.2008.00670.x","article-title":"How do board\u2014CEO relationships influence the performance of new product introduction? Moving from single to interdependent explanations","volume":"16","author":"Wu","year":"2008","journal-title":"Corp. Gov. Int. Rev."},{"key":"ref_23","first-page":"258","article-title":"Managerial risk, innovation, and organizational decline","volume":"35","author":"Latham","year":"2009","journal-title":"J. Manag."},{"key":"ref_24","doi-asserted-by":"crossref","first-page":"835","DOI":"10.1111\/j.1467-6419.2011.00681.x","article-title":"Corporate governance and innovation: A survey","volume":"26","author":"Belloc","year":"2012","journal-title":"J. Econ. Surv."},{"key":"ref_25","doi-asserted-by":"crossref","first-page":"248","DOI":"10.1016\/j.jbusvent.2010.09.003","article-title":"R&D investments in family and founder firms: An agency perspective","volume":"27","author":"Block","year":"2012","journal-title":"J. Bus. Ventur."},{"key":"ref_26","doi-asserted-by":"crossref","first-page":"1800","DOI":"10.1016\/j.respol.2014.06.003","article-title":"Outside directors on the board and innovative firm performance","volume":"43","author":"Balsmeier","year":"2014","journal-title":"Res. Policy"},{"key":"ref_27","doi-asserted-by":"crossref","first-page":"501","DOI":"10.1111\/corg.12073","article-title":"Mediation or moderation? The Role of R&D investment in the relationship between corporate governance and firm performance: Empirical evidence from the Chinese IT industry","volume":"22","author":"Zhang","year":"2014","journal-title":"Corp. Gov. Int. Rev."},{"key":"ref_28","doi-asserted-by":"crossref","first-page":"599","DOI":"10.1016\/j.jbusres.2014.09.001","article-title":"Family ownership as a moderator between R&D investments and CEO compensation","volume":"68","author":"Tsao","year":"2015","journal-title":"J. Bus. Res."},{"key":"ref_29","doi-asserted-by":"crossref","first-page":"106884","DOI":"10.1016\/j.ecolecon.2020.106884","article-title":"Driving the circular economy through public environmental and energy R&D: Evidence from SMEs in the European Union","volume":"182","author":"Lenihan","year":"2021","journal-title":"Ecol. Econ."},{"key":"ref_30","doi-asserted-by":"crossref","first-page":"101","DOI":"10.2307\/1911463","article-title":"Cost Reduction, Competition and Industry Performance","volume":"52","author":"Spence","year":"1984","journal-title":"Econometrica"},{"key":"ref_31","first-page":"1133","article-title":"Cooperative and Noncooperative R&D in Duopoly with Spillovers","volume":"78","author":"Jacquemin","year":"1988","journal-title":"Am. Econ. Rev."},{"key":"ref_32","doi-asserted-by":"crossref","first-page":"225","DOI":"10.2307\/3003549","article-title":"Strategic Commitment with R&D: The Symmetric Case","volume":"14","author":"Brander","year":"1983","journal-title":"Bell J. Econ."}],"container-title":["Games"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/www.mdpi.com\/2073-4336\/12\/3\/68\/pdf","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,10,11]],"date-time":"2025-10-11T07:00:32Z","timestamp":1760166032000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.mdpi.com\/2073-4336\/12\/3\/68"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2021,9,16]]},"references-count":32,"journal-issue":{"issue":"3","published-online":{"date-parts":[[2021,9]]}},"alternative-id":["g12030068"],"URL":"https:\/\/doi.org\/10.3390\/g12030068","relation":{},"ISSN":["2073-4336"],"issn-type":[{"value":"2073-4336","type":"electronic"}],"subject":[],"published":{"date-parts":[[2021,9,16]]}}}