Good
                    and
                    Bad
                    Increases in Ecological Awareness: Environmental Differentiation Revisited

Aurora García-Gallego; Nikolaos Georgantzis

doi:10.1561/102.00000001

journal article Oct 07, 2010

Good and Bad Increases in Ecological Awareness: Environmental Differentiation Revisited

Aurora García-Gallego Nikolaos Georgantzis

Strategic Behavior and the Environment Vol. 1 No. 1 pp. 71-88 · Emerald

View at Publisher Save 10.1561/102.00000001

Abstract

We analyze a vertically differentiated market, assuming that conventional and green firms’ products have different impacts on the environment. Heterogeneous consumers choose to be supplied by a conventional or a green firm, depending on their extra willingness to pay for a green product and the relative prices of the products in the market. We show that environmental awareness campaigns may have a negative impact on total welfare. This possibility is shown to exist without consumer misperceptions about the quality of green products and ruling out changes in the coverage and the structure of the market. Surprisingly, both conventional and green firms may benefit from heterogeneity-enhancing awareness campaigns, while social welfare is more likely to be enhanced by heterogeneity-reducing ones.

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Metrics

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Citations

28

References

Details

Published: Oct 07, 2010
Vol/Issue: 1(1)
Pages: 71-88

Authors

A

Aurora García-Gallego

Universitat Jaume I LEE, Economics Dept., , Spain

N

Nikolaos Georgantzis

Universidad de Granada GLOBE, Economics Dept., , Spain

Cite This Article

Aurora García-Gallego, Nikolaos Georgantzis (2010). Good and Bad Increases in Ecological Awareness: Environmental Differentiation Revisited. Strategic Behavior and the Environment, 1(1), 71-88. https://doi.org/10.1561/102.00000001

Good and Bad Increases in Ecological Awareness: Environmental Differentiation Revisited

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