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Social awareness and duopoly competition

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Author Info

  • nada, BELHADJ

    ()
    (ISG, University of Tunis)

  • GABSZEWICZ, Jean J.

    ()
    (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium.)

  • TAROLA, Ornella

    ()
    (DISSE, University of Rome “La Sapienza”)

Abstract

Human actions are often guided both by individual rationality and by social norms. In this paper we explore how duopoly market competition values the variants of a product, when these variants embody at different levels the requirements derived from some social norm. In a model where preferences of consumers depend partially on the levels of compliance of the variants with the social norm, we characterize the equilibrium path along which firms choose sequentially their level of compliance and their price.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2013043.

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Date of creation: 11 Sep 2013
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Handle: RePEc:cor:louvco:2013043

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Keywords: social norms; others regarding preferences; vertical product differentiation;

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  1. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
  2. José Moraga-González & Noemi Padrón-Fumero, 2002. "Environmental Policy in a Green Market," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(3), pages 419-447, July.
  3. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  4. Francesca Sanna-Randaccio & Roberta Sestini, 2010. "The Impact of Unilateral Climate Policy with Endogenous Plant Location and Market Size Asymmetry," Working Papers 2010.107, Fondazione Eni Enrico Mattei.
  5. Copeland, Brian R & Taylor, M Scott, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 755-87, August.
  6. Eriksson, Clas, 2004. "Can green consumerism replace environmental regulation?--a differentiated-products example," Resource and Energy Economics, Elsevier, vol. 26(3), pages 281-293, September.
  7. Nigar Hashimzade & Jean Hindriks & Gareth D. Myles, 2006. "Solutions Manual to Accompany Intermediate Public Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582694, December.
  8. Klaus Conrad, 2005. "Price Competition and Product Differentiation When Consumers Care for the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 31(1), pages 1-19, 05.
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Citations

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Cited by:
  1. A. Mantovani & C. Vergari, 2013. "Hedonic vs Environmental Quality: Which Policy Can Help in Lowering Pollution Emissions?," Working Papers wp906, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. MANIQUET, François & MORELLI, Massimo & ,, 2013. "Approval quorums dominate participation quorums," CORE Discussion Papers 2013054, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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