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Revenge consumption, government‐led voucher, and social welfare

Author

Listed:
  • Ji Sun
  • Qiang Gong
  • Leonard F. S. Wang

Abstract

This paper considers revenge consumption and government vouchers directly provided to the consumers in a duopoly model of vertical product differentiation. We find that revenge consumption will raise consumer surplus and social welfare. The government issuing vouchers will further push up consumer surplus and social welfare; however, facing the wave of revenge consumption, the government purposely want to recover the slowdown economy caused by the pandemic spread‐out, should fully consider the quality difference of products and issue different discount rate voucher. For the producer, whether the government issuing vouchers increase firm's profit depends on the degree of revenge consumption and product differentiation.

Suggested Citation

  • Ji Sun & Qiang Gong & Leonard F. S. Wang, 2022. "Revenge consumption, government‐led voucher, and social welfare," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2570-2577, September.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:6:p:2570-2577
    DOI: 10.1002/mde.3545
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    References listed on IDEAS

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    4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    5. Nguyen, Xuan & Chao, Chi-Chur, 2021. "Revenge consumption, product quality, and welfare," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 495-501.
    6. Junlong Chen & Xinran Xie & Jiali Liu, 2020. "Capacity sharing with different oligopolistic competition and government regulation in a supply chain," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(1), pages 79-92, January.
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