Public, Private and Nonprofit Regulation for Environmental Quality

Lucie Bottega · Jenny De Freitas

78 citations0/0 files storedJournal of Economics & Management Strategy

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Environmental Sustainability in Business Merger and Competition Analysis Regulation and Compliance Studies

Abstract

This paper studies the welfare implications of different institutions certifying environmental quality supplied by a monopoly. The monopolist can voluntarily certify the quality of the product through an eco‐label provided either by an NGO or a for‐profit private certifier (PC). The NGO and the PC may use advertisement to promote the label. We compare the NGO and PC regimes with the regime where the regulator imposes a minimum quality standard. The presence of a private certifier in the market decreases the scope for public intervention. The availability of green advertisement reinforces the above result.

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References

1988The Theory of Industrial Organization 1978Monopoly and product quality 1975Monopoly, Quality, and Regulation 2002An economic model of moral motivation 2001Non‐Mandatory Approaches to Environmental Protection 2002Environmental Labeling and Incomplete Consumer Information in Laboratory Markets 2001An Economic Model of Moral Motivation

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2013Certification of corporate social responsibility activities in oligopolistic markets 2013Strategic Corporate Social Responsibility Activities and Corporate Governance in Imperfectly Competitive Markets 2016Social Labeling by Competing NGOs: A Model with Multiple Issues and Entry 2016Buyer and Nonprofit Levers to Improve Supplier Environmental Performance 2014Voluntary Assurance of Voluntary CSR Disclosure 2017Consumer misperception of eco-labels, green market structure and welfare 2018Corporate social responsibility and product quality

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