Market incentives for the introduction of environmentally friendly products in conditions of asymmetry between companies

An unstable market economy, environmental problems arising under the influence of carbon development and the need to search for environmental innovations are becoming a challenge for the introduction of environmentally friendly products or orientation towards achieving long-term environmental goals. The purpose of the article is to identify market incentives for the introduction of environmentally friendly products based on an asymmetric duopoly and the theory of the prisoner’s dilemma (game theory), operating in conditions of limited access to information, and based on the assumption of non–interference of the state in environmental processes. The following results were obtained in the study. It was determined how market dynamics and competition affect the supply of environmentally friendly and environmentally dirty products, taking into account the cost of technology, demand formation, competitive advantages and access to information. The results demonstrate that the focus on environmentally friendly products occurs only if the costs of these innovations are low and demand is already formed. Awareness of the actions of competitors makes the market of environmentally friendly products more predictable, and more focused on the environmental friendliness of the product. The variety of environmentally friendly products is formed only under one condition – cost asymmetry. The formation of product differentiation is an important condition, since consumers in the market have different income levels. The article provides recommendations for the implementation of public policy aimed at supporting the reduction of companies’ costs for environmental innovations, and ensuring product differentiation that ensures the interests of all categories of consumers. Limitations of the study: the article does not study the demand function and its elasticity, and also does not study strategies related to the interaction of price and quantity of a productl.