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Green consumerism and collective action

Author

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  • CHANDER, Parkash
  • MUTHUKRISHNAN, Subhashini

Abstract

We analyze the effect of collective action by green/environmentally aware consumers on ambient environmental quality and market equilibrium. We consider a model with two types of consumers who differ in their willingness-to-pay for a good available in two different environmental qualities, and two competing firms: one selling the good of high environmental quality and the other of low environmental quality. We show that collective action by green consumers reduces competition and leads to higher prices for the good of both qualities. Though it improves the ambient environmental quality, it may reduce the welfare of both types of consumers.

Suggested Citation

  • CHANDER, Parkash & MUTHUKRISHNAN, Subhashini, 2007. "Green consumerism and collective action," LIDAM Discussion Papers CORE 2007058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2007058
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2007.html
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    More about this item

    Keywords

    green consumers; collective action; environmental quality; differentiated duopoly; firm profitability;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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