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Made in Italy as a collective belief.A model of investment in stereotypes

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Abstract

This paper interprets for the fist time the phenomenon of the made in Italy as a collective belief. First, a conceptual framework is proposed for analysing the formation and evolution of collective beliefs, by characterizing precisely the way individuals are expected to behave in this respect. Then, we argue that different paths may end up provoking the emergence of a collective belief, and maintain that the made in Italy can be though of as the case of a collective belief about the inventive and creative Italian way of producing a specific set of goods. Afterwards, we point to the investment in public rituals as the way to actively foster this collective belief, and then interpret such process as an economic problem of providing a public good. We highlight the main collective action implications of such analysis, by modelling individuals’ behaviour in different settings. The analysis is focused on those characteristics that make the made in Italy a special public good, such as joint private benefits, asymmetries between agents, accession costs, and transaction costs. Finally, policy and institutional implications are explored, in terms of redistribution, proactive subsidization, and contract design.

Suggested Citation

  • Nicolò Bellanca & Giovanni Canitano, 2007. "Made in Italy as a collective belief.A model of investment in stereotypes," Working Papers - Economics wp2007_05.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  • Handle: RePEc:frz:wpaper:wp2007_05.rdf
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    1. Murdoch, James C. & Sandler, Todd & Vijverberg, Wim P. M., 2003. "The participation decision versus the level of participation in an environmental treaty: a spatial probit analysis," Journal of Public Economics, Elsevier, vol. 87(2), pages 337-362, February.
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    Keywords

    collective beliefs; public rituals; impure public goods;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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