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Information Provision by Interest Groups

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  • Allard Made

Abstract

We investigate interest groups’ incentives to inform consumers about the damaging practices of firms and the impact such an IG has on firms’ technology choices. The IG aims to reduce the production of some bad, say pollution. It can at a cost investigate firms’ production practices and inform consumers about its findings. Since consumers care about the environment, revealing differences in pollution levels between firms leads to vertical product differentiation. The information, by shifting sales from ‘dirty’ towards ‘clean’ firms, reduces pollution. We show that the IG is most inclined to investigate firms in relatively competitive industries and that the threat of being unmasked as a polluter prompts dirty firms to adopt a clean technology. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Allard Made, 2014. "Information Provision by Interest Groups," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(4), pages 649-664, August.
    • Handle: RePEc:kap:enreec:v:58:y:2014:i:4:p:649-664
    DOI: 10.1007/s10640-013-9714-3
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    Cited by:

    1. Morakinyo O Adetutu & Kayode A Odusanya & Eleni Stathopoulou & Thomas G Weyman-Jones, 2023. "Environmental regulation, taxes, and activism," Oxford Economic Papers, Oxford University Press, vol. 75(2), pages 460-489.
    2. Espinola-Arredondo, Ana & Stathopoulou, Eleni & Munoz, Felix, 2019. "Regulators and Environmental Groups: Substitutes or Complements?," Working Papers 2019-1, School of Economic Sciences, Washington State University.
    3. Eleni Stathopoulou, 2014. "Environmental campaigns and endogenous technology choice under international oligopoly," Discussion Papers in Economics 14/10, Division of Economics, School of Business, University of Leicester.
    4. Eleni Stathopoulou & Luis Gautier, 2019. "Green Alliances and the Role of Taxation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1189-1206, November.

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    More about this item

    Keywords

    Green preferences; Information disclosure; Interest groups; Pollution; D80; L10; L31;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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