The Climate Pledge Friendly badge on Amazon exemplifies the benefits of such a badge, including increased sales to eco-conscious consumers, improved product visibility, and enhanced brand trust and loyalty. Despite these advantages, there is limited research on how green badges affect seller competition. We address this gap using a three-stage game model. First, two sellers set their prices and product sustainability levels, considering the marketplaces commission rate and badge threshold. Second, the marketplace sets the badge threshold and recommends products based on inferred consumer preferences.
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