Selling to Socially Responsible Consumers: The Private Provision of a Public Good

28 Pages Posted: 26 Aug 2002

Date Written: August 2002

Abstract

We model firms as competing for socially responsible consumers by linking the provision of a public good (environmentally friendly or socially responsible activities) to sales of their private goods. In many cases, too little of the public good is provided but under certain conditions, competition leads to excessive provision. Further, there is generally a trade-off between more efficient provision of the private and the public good. Our results indicate that the level of private provision of the public good varies inversely with the competitiveness of the private good market and that the types of public goods provided are biased toward those for which consumers have high participation value.

JEL Classification: D62, H41

Suggested Citation

Bagnoli, Mark E. and Watts, Susan G., Selling to Socially Responsible Consumers: The Private Provision of a Public Good (August 2002). Available at SSRN: https://ssrn.com/abstract=321480 or http://dx.doi.org/10.2139/ssrn.321480

Mark E. Bagnoli (Contact Author)

Purdue University ( email )

Department of Accounting
West Lafayette, IN 47907-1310
United States
765-494-4484 (Phone)
765-496-1778 (Fax)

Susan G. Watts

Purdue University ( email )

Department of Accounting
West Lafayette, IN 47907-1310
United States
765-494-4504 (Phone)
765-496-1778 (Fax)

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