Hedonic Quality and Social Norms: a hybrid model of product differentiation

Mantovani, Andrea ; Tarola, Ornella ; Vergari, Cecilia (2015) Hedonic Quality and Social Norms: a hybrid model of product differentiation. Bologna: Dipartimento di Scienze economiche DSE, p. 35. DOI 10.6092/unibo/amsacta/4349. In: Quaderni - Working Paper DSE (1029). ISSN 2282-6483.
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Abstract

We analyse how strategic competition between a green firm and a brown competitor develops when their products are differentiated along two dimensions: hedonic quality and environmental quality. The former dimension refers to the pure (intrinsic) performance of the good, whereas the latter dimension has a positional content: buying green goods satisfies the consumers’ desire to be socially worthy citizens. Product variants thus comply at different levels with "green" social norms. Consumer preferences depend on a combination of hedonic quality and compliance with social norms. Assuming that the high hedonic quality variant complies less with these norms than the low hedonic quality variant, we characterize different equilibrium configurations which appear as a result of both the intensity of such norms and the willingness to pay for the hedonic quality. Afterwards, we discuss the policy implications of our analysis.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Mantovani, Andrea
Tarola, Ornella
Vergari, Cecilia
Keywords
Hedonic quality, environmental quality, relative preferences
Subjects
ISSN
2282-6483
DOI
Deposit date
22 Sep 2015 08:23
Last modified
23 Oct 2015 09:26
URI

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