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Social awareness and price competition

Author

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  • Nada Ben Elhadj
  • Jean J. Gabszewicz
  • Ornella Tarola

Abstract

type="main" xml:lang="en"> Human actions are often guided both by individual rationality and by social norms. In this paper we explore how 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.

Suggested Citation

  • Nada Ben Elhadj & Jean J. Gabszewicz & Ornella Tarola, 2015. "Social awareness and price competition," International Journal of Economic Theory, The International Society for Economic Theory, vol. 11(1), pages 75-88, March.
    • Handle: RePEc:bla:ijethy:v:11:y:2015:i:1:p:75-88
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    Cited by:

    1. Dorothée Brécard & Mireille Chiroleu-Assouline, 2020. "The market for "harmful component-free" products under pressure from the NGOs," PSE Working Papers halshs-02878337, HAL.
    2. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    3. Mantovani, Andrea & Tarola, Ornella & Vergari, Cecilia, 2016. "Hedonic and environmental quality: A hybrid model of product differentiation," Resource and Energy Economics, Elsevier, vol. 45(C), pages 99-123.

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