Market equilibrium in the presence of green consumers and responsible firms: A comparative statics analysis

Nicola Doni (nicola.doni@unifi.it) and Giorgio Ricchiuti

Resource and Energy Economics, 2013, vol. 35, issue 3, 380-395

Abstract: 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.

Keywords: Green consumers; Corporate social responsibility; Vertical differentiation (search for similar items in EconPapers)
JEL-codes: D62 L13 L21 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Related works:
Working Paper: Market Equilibrium in the Presence of Green Consumers and Responsible Firms: A Comparative Statics Analysis (2011)
Working Paper: Market Equilibrium in the Presence of Green Consumers and Responsible Firms: A Comparative Statics Analysis (2011)
Working Paper: Market Equilibrium in the Presence of Green Consumers and Responsible Firms: a Comparative Statics Analysis (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:35:y:2013:i:3:p:380-395

DOI: 10.1016/j.reseneeco.2013.04.003

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