EconPapers    
Economics at your fingertips  
 

Heterogeneity in Conformism, Firm Selection, and Home Bias

Sergey Kichko and Pierre Picard ()

CREA Discussion Paper Series from Center for Research in Economic Analysis, University of Luxembourg

Abstract: This paper discusses the impact of conformism on product quality, firm selection, and trade patterns. It shows that when consumers have a higher degree of conformism and/or their distribution of conformism becomes more concentrated, the equilibrium average demand falls while product quality rises in a closed economy. In an international trade context, this strengthens the home consumption bias when consumers conform to the behavior of local people. The home bias is mitigated under globalization where individuals tend to conform to people worldwide. The paper also discusses the conditions under which conformism and conspicuousness are reconciled.

Keywords: heterogeneity in conformism; product quality; firmheterogeneity; home bias (search for similar items in EconPapers)
JEL-codes: L11 F12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ind and nep-int
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://wwwfr.uni.lu/content/download/107914/12778 ... nd%20Home%20Bias.pdf (application/pdf)

Related works:
Working Paper: Heterogeneity in Conformism, Firm Selection, and Home Bias (2018) Downloads
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:luc:wpaper:18-09

Access Statistics for this paper

More papers in CREA Discussion Paper Series from Center for Research in Economic Analysis, University of Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by Elisa Ferreira ().

 
Page updated 2019-04-20
Handle: RePEc:luc:wpaper:18-09