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 responsibility by both producers and consumers can have different impacts on the efficiency of the firms’ abatement activity, depending on the nature of the cleaning costs. When the abatement costs are fixed, the efficiency of the clean-up effort is always increasing in their degree of responsibility. On the other hand, when the abatement costs are variable, a higher level of responsibility may reduce social welfare. Finally, the first best allocation is never reached, even in the presence of the highest credible level of responsibility of both consumers and producers.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2011.33.
Date of creation: Apr 2011
Date of revision:
Green Consumers; Corporate Social Responsibility; Vertical Differentiation;
Other versions of this item:
- Doni, Nicola & Ricchiuti, Giorgio, 2013. "Market equilibrium in the presence of green consumers and responsible firms: A comparative statics analysis," Resource and Energy Economics, Elsevier, vol. 35(3), pages 380-395.
- 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.
- 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
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-05-14 (Agricultural Economics)
- NEP-ALL-2011-05-14 (All new papers)
- NEP-ENV-2011-05-14 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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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