Market equilibrium in the presence of green consumers and responsible firms: A comparative statics analysis
AbstractThis paper analyzes how the interaction between green consumers and responsible firms affects the market equilibrium. The main result is that a higher degree of responsibility of consumers and/or firms may both increase and decrease the total abatement and the social welfare. In general an increment in the degree of CSR of a firm entails an increase of its total clean-up and a reduction of the aggregate abatement of its rival. When the rival firm has a high degree of CSR this second effect is stronger than the first and total abatement falls down. At the same time, when the degree of consciousness of consumers and/or firms is very high, responsible firms overprovide environmental quality: in such case a further increment in the level of social responsibility of a market actor may trigger an increase of firms’ total clean-up but a reduction in social welfare.
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Bibliographic InfoArticle provided by Elsevier in its journal Resource and Energy Economics.
Volume (Year): 35 (2013)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/inca/505569
Green consumers; Corporate social responsibility; Vertical differentiation;
Other versions of this item:
- Nicola Doni & Giorgio Ricchiuti, 2011. "Market Equilibrium in the Presence of Green Consumers and Responsible Firms: a Comparative Statics Analysis," Working Papers Series wp2011_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze dell'Economia e Dell'Impresa.
- Nicola Doni & Giorgio Ricchiuti, 2011. "Market Equilibrium in the Presence of Green Consumers and Responsible Firms: A Comparative Statics Analysis," Working Papers 2011.33, Fondazione Eni Enrico Mattei.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
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- Roberto Rodríguez-Ibeas, 2007. "Environmental Product Differentiation and Environmental Awareness," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(2), pages 237-254, February.
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