Consumption home bias and ethnocentrism: an international duopoly

Reference : Consumption home bias and ethnocentrism: an international duopoly


	Document type :	E-prints/Working papers : First made available on ORBilu
	Discipline(s) :	Business & economic sciences : Microeconomics
	Focus Areas :	Migration and Inclusive Societies
	To cite this reference:	http://hdl.handle.net/10993/40362

Title :	Consumption home bias and ethnocentrism: an international duopoly
Language :	English
Author, co-author :	Zanaj, Skerdilajda [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Publication date :	2019
Peer reviewed :	Yes
Keywords :	[en] home bias, relative preferences, vertically differentiated model
Abstract :	[en] We define a model with two countries and two vertically differentiated goods, a high and a low-quality variant, and heterogenous consumers with respect to their willingness to pay for quality. Consumers in one country are ethnocentric in consumption. They thrive additional satisfaction when consuming a domestic good rather than a foreign one since only the former can satisfy their sense of place. We investigate the role of trade costs and ethnocentric attitude in shaping the equilibrium configuration of the international duopoly.
Permalink :	http://hdl.handle.net/10993/40362

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