At the latest research seminar hosted by WU's marketing department, Xiao Liu from New York University captivated the audience with a thought-provoking presentation on "The Impact of Sustainability Certifications on Sales and Seller Competition: Evidence from Amazon Climate Pledge Friendly." Amazon introduced the Climate Pledge Friendly (CPF) badge by consolidating various green certificates for products.

Liu dove into the nuanced effects of Amazon’s CPF badge on both consumer behavior and market dynamics, revealing how its introduction altered the competitive landscape for sellers. Her application of a game-theoretic model, paired with rigorous causal inference methods, demonstrated how the CPF badge not only boosted product sales but also allowed for higher prices when the ups of attracting consumers with a green orientation exceed alienating consumers not oriented towards green products. Liu's empirical analysis, which spanned over six months of data from 6,606 products, showcased that the badge significantly enhanced seller performance and decreased market concentration – illustrating a beneficial scenario for all market participants.

In addition to providing fresh insights into green consumer behavior, Liu's work outlined key strategic takeaways for both sellers and platforms. For sellers considering green certifications, the results highlighted optimal conditions for badge adoption, while for platforms like Amazon, the findings underscored the dynamics of consolidated eco-labeling systems. The seminar offered an invaluable perspective on how sustainability practices can reshape market dynamics, leaving the audience eager to delve further into the implications of green certifications for the future of e-commerce.