Market equilibrium in the presence of green consumers and responsible firms: A comparative statics analysis
This paper analyzes how the interaction between green consumers and responsible firms affects the market equilibrium. The main result is that a higher degree of responsibility of consumers and/or firms may both increase and decrease the total abatement and the social welfare. In general an increment in the degree of CSR of a firm entails an increase of its total clean-up and a reduction of the aggregate abatement of its rival. When the rival firm has a high degree of CSR this second effect is stronger than the first and total abatement falls down. At the same time, when the degree of consciousness of consumers and/or firms is very high, responsible firms overprovide environmental quality: in such case a further increment in the level of social responsibility of a market actor may trigger an increase of firms’ total clean-up but a reduction in social welfare.
Year of publication: |
2013
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Authors: | Doni, Nicola ; Ricchiuti, Giorgio |
Published in: |
Resource and Energy Economics. - Elsevier, ISSN 0928-7655. - Vol. 35.2013, 3, p. 380-395
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Publisher: |
Elsevier |
Subject: | Green consumers | Corporate social responsibility | Vertical differentiation |
Saved in:
Online Resource