Advanced Search
MyIDEAS: Login to save this paper or follow this series

Market Equilibrium in the Presence of Green Consumers and Responsible Firms: A Comparative Statics Analysis

Contents:

Author Info

  • Nicola Doni

    (Dipartimento Scienze Economiche, Università di Firenze)

  • Giorgio Ricchiuti

    (Dipartimento Scienze Economiche, Università di Firenze)

Abstract

This 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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.feem.it/userfiles/attach/201147950334NDL2011-033.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2011.33.

as in new window
Length:
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:fem:femwpa:2011.33

Contact details of provider:
Postal: Corso Magenta, 63 - 20123 Milan
Phone: 0039-2-52036934
Fax: 0039-2-52036946
Email:
Web page: http://www.feem.it/
More information through EDIRC

Related research

Keywords: Green Consumers; Corporate Social Responsibility; Vertical Differentiation;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. C. Lombardini-Riipinen, 2005. "Optimal Tax Policy under Environmental Quality Competition," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 32(3), pages 317-336, November.
  2. Arora, Seema & Gangopadhyay, Shubhashis, 1995. "Toward a theoretical model of voluntary overcompliance," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 28(3), pages 289-309, December.
  3. CREMER, Helmuth & MARCHAND, Maurice & THISSE, Jacques-François, . "Mixed oligopoly with differentiated products," CORE Discussion Papers RP -930, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. De Donder, Philippe & Roemer, John E., 2009. "Mixed oligopoly equilibria when firms' objectives are endogenous," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 27(3), pages 414-423, May.
  5. repec:reg:wpaper:229 is not listed on IDEAS
  6. Jean Tirole & Roland Bénabou, 2010. "Individual and Corporate Social Responsibility," Working Papers, Fondazione Eni Enrico Mattei 2010.23, Fondazione Eni Enrico Mattei.
  7. Forest L. Reinhardt & Robert N. Stavins & Richard H. K. Vietor, 2008. "Corporate Social Responsibility Through an Economic Lens," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 219-239, Summer.
  8. Brennan, Timothy J., 2006. ""Green" preferences as regulatory policy instrument," Ecological Economics, Elsevier, Elsevier, vol. 56(1), pages 144-154, January.
  9. Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer.
  10. Nicola Doni & Giorgio Ricchiuti, 2011. "Market Equilibrium in the Presence of Green Consumers and Responsible Firms: a Comparative Statics Analysis," Working Papers - Economics wp2011_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  11. Klaus Conrad, 2005. "Price Competition and Product Differentiation When Consumers Care for the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 31(1), pages 1-19, 05.
  12. K. Sridhar Moorthy, 1988. "Product and Price Competition in a Duopoly," Marketing Science, INFORMS, INFORMS, vol. 7(2), pages 141-168.
  13. Eriksson, Clas, 2004. "Can green consumerism replace environmental regulation?--a differentiated-products example," Resource and Energy Economics, Elsevier, Elsevier, vol. 26(3), pages 281-293, September.
  14. Leonardo Becchetti & Benjamin Huybrechts, 2008. "The Dynamics of Fair Trade as a Mixed-form Market," Journal of Business Ethics, Springer, Springer, vol. 81(4), pages 733-750, September.
  15. Bansal, Sangeeta, 2008. "Choice and design of regulatory instruments in the presence of green consumers," Resource and Energy Economics, Elsevier, Elsevier, vol. 30(3), pages 345-368, August.
  16. Aurora García-Gallego & Nikolaos Georgantzís, 2009. "Market Effects of Changes in Consumers' Social Responsibility," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 18(1), pages 235-262, 03.
  17. Bénabou, Roland & Tirole, Jean, 2003. "Incentives and Prosocial Behavior," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 389, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jan 2006.
  18. Koji Ishibashi & Toyokazu Kaneko, 2008. "Partial privatization in mixed duopoly with price and quality competition," Journal of Economics, Springer, Springer, vol. 95(3), pages 213-231, December.
  19. CREMER, Helmuth & THISSE, Jacques-François, . "On the taxation of polluting products in a differentiated industry," CORE Discussion Papers RP -1384, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  20. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
  21. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 100(401), pages 464-77, June.
  22. Franz Wirl, 2011. "Global Warming with Green and Brown Consumers," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 113(4), pages 866-884, December.
  23. Bansal, Sangeeta & Gangopadhyay, Shubhashis, 2003. "Tax/subsidy policies in the presence of environmentally aware consumers," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 333-355, March.
  24. Khanna, Madhu, 2001. " Non-mandatory Approaches to Environmental Protection," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 15(3), pages 291-324, July.
  25. Aleix Calveras & Juan-JosÉ Ganuza & Gerard Llobet, 2007. "Regulation, Corporate Social Responsibility and Activism," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 16(3), pages 719-740, 09.
  26. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 93(3), pages 488-511, June.
  27. David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 10(1), pages 7-45, 03.
  28. Mark Bagnoli & Susan G. Watts, 2003. "Selling to Socially Responsible Consumers: Competition and The Private Provision of Public Goods," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 12(3), pages 419-445, 09.
  29. José Moraga-González & Noemi Padrón-Fumero, 2002. "Environmental Policy in a Green Market," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 22(3), pages 419-447, July.
  30. Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
  31. Matthew J. Kotchen, 2003. "Impure Public Goods and the Comparative Statics of Environmentally Friendly Consumption," Department of Economics Working Papers 2003-06, Department of Economics, Williams College.
  32. Besley, Timothy & Ghatak, Maitreesh, 2007. "Retailing public goods: The economics of corporate social responsibility," Journal of Public Economics, Elsevier, Elsevier, vol. 91(9), pages 1645-1663, September.
  33. Motta, Massimo, 1993. "Endogenous Quality Choice: Price vs. Quantity Competition," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 41(2), pages 113-31, June.
  34. Roberto Rodríguez-Ibeas, 2007. "Environmental Product Differentiation and Environmental Awareness," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 36(2), pages 237-254, February.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. 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, Elsevier, vol. 35(3), pages 380-395.
  2. L. Lambertini & G. Pignataro & A. Tampieri, 2014. "Green Consumers, Greenwashing and the Misperception of Environmental Quality," Working Papers wp958, Dipartimento Scienze Economiche, Universita' di Bologna.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2011.33. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.