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Do markets erode social responsibility?


Bartling, Björn; Weber, Roberto A (2013). Do markets erode social responsibility? UBS Center Working Paper Series 6, University of Zurich : UBS International Center of Economics in Society.

Abstract

This paper studies the stability of socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs entirely mitigates the externality. Our data reveal a robust and persistent preference for avoiding negative social impact in the market, reflected both in the composition of product types and in a price premium for socially responsible products. Socially responsible behavior in the market is generally robust to varying market characteristics, such as increased seller competition and limited consumer information. Fair behavior in the market is slightly lower than that measured in comparable individual decisions.

Abstract

This paper studies the stability of socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs entirely mitigates the externality. Our data reveal a robust and persistent preference for avoiding negative social impact in the market, reflected both in the composition of product types and in a price premium for socially responsible products. Socially responsible behavior in the market is generally robust to varying market characteristics, such as increased seller competition and limited consumer information. Fair behavior in the market is slightly lower than that measured in comparable individual decisions.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > UBS International Center of Economics in Society
03 Faculty of Economics > Department of Economics
Working Paper Series > UBS Center Working Paper Series
Dewey Decimal Classification:330 Economics
JEL Classification:C92, D03, D62
Uncontrolled Keywords:Social responsibility, markets, externalities, competition, fairness
Language:English
Date:November 2013
Deposited On:18 Dec 2013 16:30
Last Modified:14 Aug 2017 18:25
Series Name:UBS Center Working Paper Series
Number of Pages:50
ISSN:2296-2751
Official URL:http://www.ubscenter.uzh.ch/assets/workingpapers/WP6_Do_Markets_Erode_Social_Responsibility.pdf
Related URLs:http://www.ubscenter.uzh.ch/en/publications/workingpapers

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