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Social awareness and duopoly competition

Author

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  • nada, BELHADJ

    (ISG, University of Tunis)

  • GABSZEWICZ, Jean J.

    (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium.)

  • TAROLA, Ornella

    (DISSE, University of Rome “La Sapienza”)

Abstract

Human actions are often guided both by individual rationality and by social norms. In this paper we explore how duopoly market competition values the variants of a product, when these variants embody at different levels the requirements derived from some social norm. In a model where preferences of consumers depend partially on the levels of compliance of the variants with the social norm, we characterize the equilibrium path along which firms choose sequentially their level of compliance and their price.

Suggested Citation

  • nada, BELHADJ & GABSZEWICZ, Jean J. & TAROLA, Ornella, 2013. "Social awareness and duopoly competition," LIDAM Discussion Papers CORE 2013043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2013043
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. A. Mantovani & C. Vergari, 2013. "Hedonic vs Environmental Quality: Which Policy Can Help in Lowering Pollution Emissions?," Working Papers wp906, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. YATSENKO, Yuri & HRITONENKO, Natali & BRECHET, Thierry, 2014. "Modeling of environmental adaptation versus pollution mitigation," LIDAM Discussion Papers CORE 2014006, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. DASH, Sanjeeb & GÜNLÜK, Oktay & WOLSEY, Laurence A., 2014. "The continuous knapsack set," LIDAM Discussion Papers CORE 2014007, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    5. Ornella Tarola & Skerdilajda Zanaj, 2019. "Social division in the market: conspicuous consumption with nationalist feelings," DEM Discussion Paper Series 19-12, Department of Economics at the University of Luxembourg.
    6. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    7. Dorothée Brécard & Mireille Chiroleu-Assouline, 2020. "The market for "harmful component-free" products under pressure from the NGOs," PSE Working Papers halshs-02878337, HAL.
    8. Ornella Tarola & skerdilajda Zanaj, 2020. "Globalization of Markets and Ethnocentrism: New Insights for the Environment," DEM Discussion Paper Series 20-18, Department of Economics at the University of Luxembourg.
    9. François Maniquet & Massimo Morelli, 2015. "Approval quorums dominate participation quorums," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(1), pages 1-27, June.
    10. Becchetti, Leonardo & Palestini, Arsen & Solferino, Nazaria & Elisabetta Tessitore, M., 2014. "The socially responsible choice in a duopolistic market: A dynamic model of “ethical product” differentiation," Economic Modelling, Elsevier, vol. 43(C), pages 114-123.
    11. Mark Bagnoli & Susan G. Watts, 2020. "On the corporate use of green bonds," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(1), pages 187-209, January.
    12. A. Mantovani & O. Tarola & C. Vergari, 2014. "On the effect of social norms to reduce pollution," Working Papers wp950, Dipartimento Scienze Economiche, Universita' di Bologna.
    13. Jean Gabszewicz & Ornella Tarola & Skerdilajda Zanaj, 2019. "Consumption home bias and ethnocentrism: an international duopoly," DEM Discussion Paper Series 19-13, Department of Economics at the University of Luxembourg.

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    More about this item

    Keywords

    social norms; others regarding preferences; vertical product differentiation;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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