Revenge consumption, government‐led voucher, and social welfare

Ji Sun, Qiang Gong and Leonard F. S. Wang

Managerial and Decision Economics, 2022, vol. 43, issue 6, 2570-2577

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.

Date: 2022
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https://doi.org/10.1002/mde.3545

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:43:y:2022:i:6:p:2570-2577

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