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Greening or greenwashing? How consumers’ beliefs influence firms’ advertising strategies on environmental quality

Author

Listed:
  • Lucie Bottega

    (Toulouse School of Economics, LERNA)

  • Dorothée Brécard

    (Université de Toulon, LEAD)

  • Philippe Delacote

    (Université de Lorraine, AgroParisTech-INRAe, BETA, Climate Economics Chair)

Abstract

When consumers have ambiguous beliefs about the green quality of products, firms may be tempted to "greenwash". The degrees of optimism and confidence of consumers then play a crucial role in firms’ advertising strategies, which can be either informative and/or persuasive. We find conditions under which advertising efforts and environmental quality are substitutes and thus lead to greenwashing.

Suggested Citation

  • Lucie Bottega & Dorothée Brécard & Philippe Delacote, 2023. "Greening or greenwashing? How consumers’ beliefs influence firms’ advertising strategies on environmental quality," Working Papers 2023.05, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2019.nn
    as

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    File URL: http://faere.fr/pub/WorkingPapers/Bottega_Brecard_Delacote_FAERE_WP2023.05.pdf
    File Function: First version, 2019
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    ambiguity; vertical differentiation; information; advertising; greenwashing;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other

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