conformity and the demand for environmental goods the existing literature on eco labeling and green consumerism has been framed within a classical market context where price and quality are the drivers of consumer choice however it seems possible that consumers are also concerned about the choices made by other consumers in fact it is unclear that people s consumption decisions are made independently of social context for instance under the desire to conform to certain social norms or in the presence of status concerns some individuals may be willing to pay a higher price premium for green products the more widespread green consumerism is in society we test this hypothesis using a choice experiment where the respondents were asked to choose among coffee products varying with respect to their share of ecological beans share of fair trade beans and price three treatments were used differing only in the information given about the choices made by other consumers we find different responses to the treatments across individuals and we can only confirm our hypothesis of conformity for women although men appear to have stronger preferences for ecological coffee than women have

environmental quality competition and eco labeling abstract a three stage game of investment environmental quality provision and price competition is developed to study the impact of green technology investment eco labeling in a duopoly model of vertical product differentiation the firms incentives to invest in green technologies depend on their relative cost structure when firms are identical with respect to fixed costs both firms will always invest but if one firm is more efficient in investing then the other firm may or may not invest depending on the level of unit cost of investment quality competition will be tighter when the low quality firm is more efficient and looser when the high quality firm is more efficient in investing socially optimal investment for both firms is always positive but lower than in the duopoly solution in the absence of environmental externalities the quality dispersion chosen by profit maximizing firms may be too high or too low while environmental externalities increase the possibility low quality dispersion that is too low within the market solution finally and importantly ecolabeling can be used as a means of reducing excessive investment and increasing environmental quality that is too low

toward a theoretical model of voluntary overcompliance abstract we explain why some firms voluntarily overcomply with environmental regulation in our model all consumers value environmental quality but differ in their willingness to pay which depends on their income levels publicly available information on environmental performance of firms enables consumers to identify clean firms firms participate in a two stage duopoly game where they first choose their levels of cleaning technology and next engage in price competition the market gets segmented by income levels a minimum standard binding on the dirty firm has the effect of improving the performance of the cleaner firm a subsidy obtains the same competitive outcome

the restoration of welfare economics this paper argues that welfare economics should be restored to a prominent place on the agenda of economists and should occupy a central role in the teaching of economics economists should provide justification for the ethical criteria underlying welfare statements and these criteria require constant reevaluation in the light of developments in economic analysis and in moral philosophy economists need to be more explicit about the relation between welfare criteria and the objectives of governments policymakers and individual citizens moreover such a restoration of welfare economics should be accompanied by consideration of the adoption of ethical guidelines for the economics profession

optimal tax policy under environmental quality competition this paper studies the socially optimal emission and commodity tax policy when consumers are willing to pay a price premium for environmentally friendlier variants of a commodity vertically differentiated in environmental quality the first best levels of quality can be obtained by a combination of a uniform ad valorem tax and an emission tax or a subsidy for buying green products the first best emission tax is higher than the social valuation of the positive externality associated with average environmental quality regardless of environmentally conscious consumers if only one instrument is available the second best emission tax is equal to the social valuation of the positive externality associated with average environmental quality a uniform ad valorem tax increases welfare only if the social valuation of the positive externality associated with average environmental quality is low enough

quality competition and environmental damage is there a role for network preferences abstract we consider from a theoretical and empirical viewpoint how network preferences of consumers which differ in their willingness to pay wtp for green goods affect the equilibrium configuration of a vertically differentiated duopoly when a cleaner firm competes against a dirtier rival we find that a trade off can emerge between emissions abatement and the catching up process of the dirtier firm can emerge in particular emissions decrease only when consumers with low wtp have network preferences still in this case only the cleaner firm has an incentive to improve its environmental quality along the quality ladder while the laggard firm is tied to its backward profile these theoretical predictions are empirically tested by exploiting the duality of italy s economy with high income citizens mainly concentrated in northern regions while low income citizens are largely located in the south we adopt a fixed effects spatial error model at the provincial level to relate variables on firms environmental management system with citizens environmental behaviour proxied by the recycling rate overall the empirical estimates are in line with the theoretical predictions from the empirical analysis it emerges that consumers environmental behaviour positively affects enterprises future environmental choices moreover firms have a stronger incentive to raise their environmental quality when low income consumers namely those buying dirtier variants internalise the network effect

determinants of pro environmental consumption the role of reference groups and routine behavior abstract this paper investigates the determinants of pro environmental consumption focusing on the role of reference groups and routine behavior we study the factors that explain whether or not people have installed residential solar energy equipment or have subscribed to green electricity programs and the factors that influence the intensity of buying organic food in addition to demographic characteristics and environmental attitudes we consider the following categories of determinants economic and cognitive factors income estimated price premium level of information on environmentally friendly goods consumption patterns of reference persons own consumption patterns in the past using a unique data set from a survey conducted in the region of hanover germany we find the following 1 economic and cognitive factors are significant covariates of all three kinds of pro environmental consumption their influence is greatest in the case of green electricity 2 consumption patterns of reference persons are significant covariates of all three kinds of pro environmental consumption their influence is greatest in the case of organic food 3 the intensity of buying organic food is greater the longer people have been consumers of these goods

commodity taxation in a differentiated oligopoly the authors introduce commodity taxation into a vertical differentiation model with endogenous product selection they show that a uniform ad valorem tax lowers both qualities distorts the allocation of consumers between firms and lowers the consumer prices of both variants a small uniform tax is always welfare improving over the no tax equilibrium a differentiation of tax rates may or may not be desirable on welfare grounds if a welfare improvement is possible through a nonuniform tax it is always the high quality variant that must be taxed at a higher rate copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

environmental policy in a green market this paper studies the impact of some frequently used environmental policies in a duopolistic market where purchasers are willing to pay more for less polluting goods when consumers differ in their environmental awareness a cleaner and a dirtier variant coexist in equilibrium the higher the average willingness to pay for the good the lower are variants unit emissions but the higher are industrial aggregate effluents a maximum unit emission standard reduces unit emissions of both variants but boosts firms sales and consequently increases industrial aggregate emissions as a result social welfare may be reduced we also explore the effects of technological subsidies and product charges including differentiation of charges

on the taxation of polluting products in a differentiated industry this paper studies the provision of environmental quality in an imperfectly competitive market it uses a vertical differentiation model in which the free entry equilibrium results in an under provision of quality the following main results are obtained first a commodity tax may have a significant impact on the market structure in this setting it tends to increase the number of active firms second through its impact on market structure a commodity tax may be welfare improving even though quality creates a positive externality third a commodity tax may bring about an equilibrium that is arbitrarily close to a pareto efficient allocation

environmental quality competition and taxation in the presence of green network effect among consumers we examine the impact of a green network effect in a market characterized by consumers environmental awareness and competition between firms in terms of both environmental quality and product prices the unique aspect of this model comes from the assumption that an increase in the number of consumers of green brown product increases the satisfaction of each green brown consumer we show that paradoxically when the network effect of a green product is higher than that of a brown product this externality reduces product environmental quality and raises consumption of the green product conversely when the network effect of the brown product is higher the externality improves product environmental quality and raises consumption of the brown product in both cases the network effect does not affect the overall pollution level the externality correction requires the use of three optimal fiscal policies an ad valorem tax on products an emission tax and a subsidy or a tax on the green purchase a second best optimum can also be reached through the green taxation

using contingent valuation to explore willingness to pay for renewable energy a comparison of collective and voluntary payment vehicles abstract this study uses a split sample dichotomous choice contingent valuation survey of 1574 u s residents to explore willingness to pay wtp for renewable energy under collective and voluntary payment vehicles and under government and private provision of the good we also evaluate the impact of participation expectations on stated wtp we find some evidence that when confronted with a collective payment mechanism respondents state a somewhat higher wtp than when voluntary payment mechanisms are used similarly private provision of the good elicits a somewhat higher wtp than does government provision we also find that contingent valuation responses are strongly correlated with expectations for the wtp of others our results shed light on strategic response behavior and the incentive compatibility of different cv designs and offer practical insight into u s household preferences for how to support renewable energy

tax competition in vertically differentiated markets with environmentally conscious consumers this paper analyses the effects of tax competition on environmental product quality pollution and welfare in a two country vertically differentiated international duopoly in which consumers are environmentally conscious the firm in each country chooses first the environmental quality of its product which reflects the emissions generated in the production process and then the price in equilibrium one country will be more polluted than the other because firms choose different levels of environmental quality of their products we find that a country s optimal commodity tax is higher if the domestic firm is the more polluting supplier furthermore non cooperative commodity tax rates are inefficiently high in equilibrium this is because in this framework with environmentally aware consumers commodity taxes affect the choice of firms regarding their emissions therefore a domestic tax reduction not only raises the profits of the foreign firm but also lowers its emission levels resulting in higher welfare for the other country we also analyse the optimal cooperative and non cooperative commodity and emission taxes with border tax adjustments with these two policy instruments available commodity taxes are higher

price competition when consumer behavior is characterized by conformity or vanity it has long been recognized that the pleasure of consuming a good may be affected by the consumption choice of other consumers in some cases social pressures may lead to conformity in some others individuals may feel the need of exclusiveness under the form of vanity such externalities have proven to be important in several markets however the market implication of these externalities are still unclear to investigate them we propose to combine the consumption externality model and the spatial duopoly model when conformity is present but not too strong both firms remain in business but price competition is fiercer and results in lower prices the market share of the large firm increases with the population size as the population keeps rising the large firm may serve the entire market and set a price that has the nature of a limit price when conformity is strong enough different equilibria may exist in most of these equilibria a single firm captures the whole market at the other extreme when vanity is at work price competition is relaxed

optimal tax treatment of private contributions for public goods with and without warm glow preferences abstract tax favored contributions for financing some public goods may be a useful part of optimal nonlinear income tax and expenditure policy there are two sides to the potential gain from subsidized donations first for a given level of public good provision higher private donations from high earners than low earners eases the incentive compatibility constraint for donors and so can raise social welfare this follows since considering a lower paid job includes a perception of a drop in public good provision second private donation reduces consumption easing the resource constraint this paper explores optimal policy using first a model with standard preferences and then a model with a warm glow of giving in addition to showing the conditions for the level of public goods the paper considers the pattern of optimal subsidization across earnings levels analysis of optimal taxation with warm glow preferences is sensitive to the choice of preferences that are relevant for a social welfare evaluation after considering optimal rules with formulations of social welfare which do and do not include warm glow utility the paper considers the choice of normative criterion like the earlier literature this paper assumes that organizing private donations is costless while tax collection has a deadweight burden since private charitable fundraising is very far from costless the paper is an exploration of economic mechanisms not a direct guide to policy

to fight or not to fight an analysis of submission struggle and the design of contests this paper considers the players behaviour in an asymmetric two player contest when do they decide to struggle and when to subjugate analysing contest success functions it is found that two crucial prerequisites for struggle or war have to be met thus such an equilibrium is possible but restrictive if a self interested rule setter chooses the contest success function endogenously we show that one player will always subjugate applications to rent seeking and environmental regulation are discussed

endogenous quality choice price vs quantity competition two versions of a vertical product differentiation model one with fixed and the other with variable costs of quality are analyzed to study how the hypotheses of price versus quantity competition affect equilibrium solutions product differentiation arises under all the scenarios considered contrasting previous findings of symmetric quality choices under cournot behavior however to relax harsher market competition firms differentiate more under bertrand than under cournot a simple welfare measure also indicates that the economy is better off when firms compete on prices with fixed costs of quality not only consumer but also producer surplus is higher under price competition copyright 1993 by blackwell publishing ltd

tax subsidy policies in the presence of environmentally aware consumers abstract we study policy measures to improve environmental quality in the presence of environmentally aware consumers we consider two sets of policy instruments uniform policies for the firms and policies that discriminate between the firms based on their environmental quality for the latter set either the better performer is rewarded with a subsidy or the worse performer is punished with a tax we find that while a uniform subsidy policy improves average environmental quality a uniform tax policy worsens it further while a discriminatory subsidy policy reduces total pollution and enhances aggregate welfare a discriminatory tax policy may increase total pollution and may reduce aggregate welfare

environmental policy the porter hypothesis and the composition of capital effects of learning and technological progress abstract in this paper the effect of environmental policy on the composition of capital is investigated by allowing for nonlinearities it generalizes xepapadeas and de zeeuw j environ econ manage 37 1999 165 and determines scenarios in which their results do not carry over in particular we show that the way acquisition cost of investment decreases with the age of the capital stock is of crucial importance we also focus more explicitly on learning and technological progress among others we obtain that in the presence of learning implementing a stricter environmental policy with the aim to reach a certain target of emissions reduction has a stronger negative effect on industry profits which implies quite the opposite as to what is described by the porter hypothesis