Variety-Controlling Public Policy Under Addiction and Saturation

Nobuko Serizawa and Shigeru Wakita
Additional contact information
Nobuko Serizawa: Niigata University
Shigeru Wakita: Tokyo Metropolitan University

The Japanese Economic Review, 2016, vol. 67, issue 1, No 7, 125-140

Abstract: Abstract This paper constructs a tractable general equilibrium model for investigating the dissimilar effects of addiction and saturation on consumption and public policy. By introducing an industry-specific intertemporal consumption externality, we provide clear analytical results that a lump-sum subsidy for firms can increase welfare in the presence of a negative externality (saturation). A tax can accomplish the same given a positive externality (addiction). Unlike existing studies of cultural goods, these results are not based on assumptions concerning exogenous different preferences across groups, but rather on conventional monopolistic competition and consumption habit formation models in macroeconomics.

Keywords: F12; F13; H20; Z10 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1111/jere.12075 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jecrev:v:67:y:2016:i:1:d:10.1111_jere.12075

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/42973

DOI: 10.1111/jere.12075

Access Statistics for this article

The Japanese Economic Review is currently edited by Michihiro Kandori

More articles in The Japanese Economic Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().