Social awareness and price competition

Ben Elhadj, Nada;Jaskold Gabszewicz, Jean;Tarola, Ornella
(2015) International Journal of Economic Theory — Vol. 11, n° 1, p. 75-88 (2015)

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Authors
  • Ben Elhadj, NadaISG, University of Tunis
    Author
  • Jaskold Gabszewicz, JeanUCLouvain
    Author
  • Tarola, OrnellaUniversity of Roma La Sapienza
    Author
Abstract
Human actions are often guided both by individual rationality and by social norms. In this paper we explore how market competition values the variants of a product, when these variants embody at different levels the requirements derived from some social norm. In a model where preferences of consumers depend partially on the levels of compliance of the variants with the social norm, we characterize the equilibrium path along which firms choose sequentially their level of compliance and their price.
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Ben Elhadj, N., Jaskold Gabszewicz, J., & Tarola, O. (2015). Social awareness and price competition. International Journal of Economic Theory, 11(1), 75-88. https://doi.org/10.1111/ijet.12053 (Original work published 2015)