Green consumerism and collective action

Parkash Chander and Subhashini Muthukrishnan

No 2007058, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

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.

Keywords: green consumers; collective action; environmental quality; differentiated duopoly; firm profitability (search for similar items in EconPapers)
JEL-codes: H23 L13 Q20 (search for similar items in EconPapers)
Date: 2007-08-01
New Economics Papers: this item is included in nep-com, nep-ene, nep-env and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2007058

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