Description

Long essay originally written as M.Sc. thesis. The microeconomic implicatios of the growing environmental awareness of consumers are discussed. It is hypothesized that firms build “green reputations” signalling environmental friendliness of products and processes, similar to brand reputation already studied by oligopoly theory. A simple optimal control model explaining investment and disinvestment in green reputation in a stylized setting is developed. Published in Annali della Fondazione Einaudi.