Strategic Behavior and the Environment > Vol 5 > Issue 3–4

Misinformation and its Implications for Green Markets

Nathan W. Chan, Department of Economics, Colby College, USA, nwchan@colby.edu
 
Suggested Citation
Nathan W. Chan (2015), "Misinformation and its Implications for Green Markets", Strategic Behavior and the Environment: Vol. 5: No. 3–4, pp 301-316. http://dx.doi.org/10.1561/102.00000062

Published: 22 Dec 2015
© 2015 N. W. Chan
 
Subjects
Collective action,  Public Economics:Public Goods,  Environmental Economics
 
Keywords
Q50H41D80
InformationGreen marketsPublic goodsGreenwashing
 

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In this article:
1. Introduction
2. Base Model
3. Misinformation
4. Discussion
Appendix
References

Abstract

This paper develops and analyzes a model of misinformation in markets for so-called "green" products, and more generally, impure public goods. Unlike previous studies of green goods, I account for strategic interactions between consumers and consider equilibrium outcomes under misinformation. A major finding is that misinformation can help or harm environmental quality and welfare, and the direction of these changes depends critically upon whether "green" or "brown" consumers are more likely to be misinformed. These results are particularly germane to markets where nascent methods for analyzing environmental impacts, like lifecycle assessments (LCA) and carbon footprinting, are applied.

DOI:10.1561/102.00000062