Impacts of Optimistic Green R&D in a Sustainable Supply Chain with Information Asymmetry

With consumers increasing in environmental awareness, manufacturers have integrated green R&D into their strategies, aiming to grasp the green market. However, manufacturers may be too bullish on the market potential of green products and maintain an optimistic attitude toward green R&D. Despite having an optimistic attitude, manufacturers often have no demand information advantage over downstream retailers due to their position in the supply chain, away from the market. It is worth exploring what impact optimistic green R&D in a sustainable supply chain with demand information asymmetry will have. Previous studies have not managed to reveal this. In this study, a stylized model is introduced to explore this question. The main findings are as follows: (1) optimistic green R&D increases the feasibility of the retailer sharing demand information, which facilitates information communication in the sustainable supply chain; (2) in most cases, optimistic green R&D does not bring higher profits for the manufacturer, yet is likely to allow the retailer to earn more, thereby resulting in a loss–win outcome; and (3) depending on the green R&D efficiency of the manufacturer and the consumer’s environmental awareness, optimistic green R&D may not generate higher environmental benefits.