Information Provision by Interest Groups

Allard Made ()

Environmental & Resource Economics, 2014, vol. 58, issue 4, 649-664

Abstract: We investigate interest groups’ incentives to inform consumers about the damaging practices of firms and the impact such an IG has on firms’ technology choices. The IG aims to reduce the production of some bad, say pollution. It can at a cost investigate firms’ production practices and inform consumers about its findings. Since consumers care about the environment, revealing differences in pollution levels between firms leads to vertical product differentiation. The information, by shifting sales from ‘dirty’ towards ‘clean’ firms, reduces pollution. We show that the IG is most inclined to investigate firms in relatively competitive industries and that the threat of being unmasked as a polluter prompts dirty firms to adopt a clean technology. Copyright Springer Science+Business Media Dordrecht 2014

Keywords: Green preferences; Information disclosure; Interest groups; Pollution; D80; L10; L31 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s10640-013-9714-3

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