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Competition and Co-Operation when Consumers' Sustainability Preferences Depend on Social Norms

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  • Roman Inderst
  • Eftichios Sartzetakis
  • Anastasios Xepapadeas

Abstract

We posit that consumers' preferences for more sustainable products depend on the perceived social norm, which in turn is shaped by average consumption in society. We explore the implications of such preferences for firms' incentives to introduce more sustainable products and to co-operate in order to either foster or forestall their introduction. Our main motivation lies in the increasing pressure put on antitrust authorities to exert more leniency towards horizontal agreements that are motivated by sustainability considerations.

Suggested Citation

  • Roman Inderst & Eftichios Sartzetakis & Anastasios Xepapadeas, 2021. "Competition and Co-Operation when Consumers' Sustainability Preferences Depend on Social Norms," DEOS Working Papers 2109, Athens University of Economics and Business.
    • Handle: RePEc:aue:wpaper:2109
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    File URL: http://wpa.deos.aueb.gr/docs/Sustainable.10.8.pdf
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    References listed on IDEAS

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    1. Roman Inderst & Kiryl Khalmetski & Axel Ockenfels, 2019. "Sharing Guilt: How Better Access to Information May Backfire," Management Science, INFORMS, vol. 65(7), pages 3322-3336, July.
    2. Nyborg, Karine & Howarth, Richard B. & Brekke, Kjell Arne, 2006. "Green consumers and public policy: On socially contingent moral motivation," Resource and Energy Economics, Elsevier, vol. 28(4), pages 351-366, November.
    3. Griva, Krina & Vettas, Nikolaos, 2011. "Price competition in a differentiated products duopoly under network effects," Information Economics and Policy, Elsevier, vol. 23(1), pages 85-97, March.
    4. Roman Inderst & Eftichios Sartzetakis & Anastasios Xepapadeas, 2021. "Technical Report on Sustainability and Competition," DEOS Working Papers 2103, Athens University of Economics and Business.
    5. Grilo, Isabel & Shy, Oz & Thisse, Jacques-Francois, 2001. "Price competition when consumer behavior is characterized by conformity or vanity," Journal of Public Economics, Elsevier, vol. 80(3), pages 385-408, June.
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    8. Christos Constantatos & Christos Pargianas & Eftichios S. Sartzetakis, 2021. "Green consumers and environmental policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(1), pages 105-140, February.
    9. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
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    Cited by:

    1. Inderst, Roman & Thomas, Stefan, 2022. "Nachhaltigkeit und Wettbewerb: Zu einer Reform des Wettbewerbsrechts für die Erreichung von Nachhaltigkeitszielen," SAFE Policy Letters 94, Leibniz Institute for Financial Research SAFE.

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