On the Effect of Social Norms to Reduce Pollution

Quaderni - Working Paper DSE N° 950

31 Pages Posted: 18 Jun 2014

See all articles by Andrea Mantovani

Andrea Mantovani

University of Bologna

Ornella Tarola

University of Lugano - Institute of Economic Research

Cecilia Vergari

University of Bologna - Department of Economics

Date Written: June 16, 2014

Abstract

We analyse how market competition in a vertically differentiated polluting industry is affected by product variants that comply at different levels with "green" social norms. A green consumption behaviour is considered as a byword of good citizenship. Consumer preferences depend on a combination of hedonic quality and compliance with the norms. Assuming that the high hedonic quality variant complies less with the norms than the low hedonic quality one, we characterize the different equilibrium configurations, depending on the perceived intensity of such norms. Then, we focus on the role that institutions may have in using these norms to reduce pollution emissions.

Keywords: social norms, Hedonic quality, environmental quality, relative preferences, vertical differentiation

JEL Classification: D62, L13, H13

Suggested Citation

Mantovani, Andrea and Tarola, Ornella and Vergari, Cecilia, On the Effect of Social Norms to Reduce Pollution (June 16, 2014). Quaderni - Working Paper DSE N° 950. Available at SSRN: https://ssrn.com/abstract=2451089 or http://dx.doi.org/10.2139/ssrn.2451089

Andrea Mantovani (Contact Author)

University of Bologna ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

Ornella Tarola

University of Lugano - Institute of Economic Research ( email )

CH-6900 Lugano
Switzerland
+41919124661 (Phone)
+41919124662 (Fax)

Cecilia Vergari

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40100
Italy

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