On Ethical Product Differentiation with Asymmetric Distance Costs

Leonardo Becchetti, Luisa Giallonardo () and Maria Elisabetta Tessitore ()
Additional contact information
Luisa Giallonardo: Università di Roma "Tor Vergata"
Maria Elisabetta Tessitore: Università di Roma "Tor Vergata"

Rivista di Politica Economica, 2007, vol. 97, issue 5, 55-82

Abstract: In our model of ethical product differentiation two duopolists, a profit maximizing producer (PMP) and a "socially responsible" (SR) producer, compete over prices and "socially and environmentally responsible" features of their products. We show that the PMP finds it optimal to reduce his price after the SR producer’s entry when his location is fixed.We also outline equilibria in a sequential game in which the SR producer is a Stackelberg leader. We show that, when consumers’ perceived costs of ethical distance are high enough, equilibria have three main features: minimum price differentiation, ethical imitation and non minimal ethical differentiation.

JEL-codes: L11 L31 (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.rivistapoliticaeconomica.it/2007/set-ot/becchetti_giallonardo.php
Payment required

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:rpo:ripoec:v:97:y:2007:i:5:p:55-82

Access Statistics for this article

Rivista di Politica Economica is currently edited by Gustavo Piga

More articles in Rivista di Politica Economica from SIPI Spa
Bibliographic data for series maintained by Sabrina Marino ().