Abstract. Given the increasing share of the EU budget devoted to Regional Policy, several studies have tried to identify the impact of structural funds on economic growth. However, so far no consensus has been reached. We assess Regional Policy effects through a non-experimental comparison group method, the regression discontinuity design, and a novel regional dataset for the 1994-2006 period. We exploit the allocation rule of EU transfers by comparing regions with a per capita GDP level just below the eligibility threshold (75% of EU average) with those just above. Our findings show a positive impact of EU Regional Policy on economic growth. JEL classification: O18, O47, C14

In a vertically differentiated setting, we consider a two-stage game between a clean firm and a dirty producer with quality competition at the first stage and price competition at the second stage under the assumption that consumers have relative preferences for quality. The equilibrium configuration changes depending on the consumers' dispersion and the relative preferences: either both producers are active at equilibrium, or the green producer is the only firm active in the market, the brown competitor being out. We analyze how the equilibrium changes when preferences are country specific (developed vs. developing countries). Finally, we show that whatever the market configuration at equilibrium, there can be a pollution damage reduction compared to the standard case without relative preferences. To the best of our knowledge, we are the first to introduce in the literature of green consumerism the notion of (possibly country-specific) relative preferences.

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We prove that a su¢cient condition for the core existence in a n-Örm vertically di §erentiated market is that the qualities of Örmsí products are equally-spaced along the quality spectrum. This result contributes to see that a fully collusive agreement among Örms in such markets is more easily reachable when product qualities are not distributed too asymmetrically along the quality ladder.

tIn this paper, we analyze how strategic competition between a green firm and a browncompetitor develops when their products are differentiated along two dimensions: hedonicquality and environmental quality. The former dimension refers to the pure (intrinsic) per-formance of the good, whereas the latter dimension has a positional content: buying greengoods satisfies the consumer’s desire to be portrayed as a socially worthy citizen. We con-sider the case in which these quality dimensions are in conflict with each other so that thehigher the hedonic quality of a good, the lower the corresponding environmental quality.We characterize the equilibrium configurations and discuss the policy implications deriving from ou model

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.

This paper studies the incentives of firms selling vertically differentiated products to merge. To this aim, we introduce a three-stage game in which, at the first stage, three independent firms can decide to merge with their competitors via a sequential game of coalition formation and, at the second and third stage, they can optimally revise their qualities and prices, respectively. We study whether such binding agreements (i.e. full or partial mergers) can be sustained as subgame perfect equilibria of the coalition formation game, and analyze their effects on equilibrium qualities, prices and profits. We find that, although profitable, the merger-to-monopoly of all firms is not an outcome of the finite-horizon negotiation, where only partial mergers arise. Moreover, we show that all stable mergers always include the firm initially producing the bottom quality good and reduce the number of variants on sale.

We consider an open to trade two-country model with two vertically di¤erentiated goods and relative preferences in consumption. These preferences are such that consumers obtain satisfaction from their own consumption in relation to the consumption of the others. Product di¤erentiation is along an environmental quality dimension and countries are asymmetric in average income. Analyzing the equilibrium con…guration, we …nd that, when relative preferences are relegated to the poorer country producing the brown good, the process of trade liberalization can favor the polluting …rm, while penalizing the green rival. In these circumstances, trade liberalization can be environmentally detrimental. At the opposite, trade liberalization always favors the green producer when relative preferences are observed in both countries, with possibly positive e¤ects on global emissions.