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Revealing good deeds: disclosure of social responsibility in competitive markets

Author

Listed:
  • Sören Harrs

    (University of Cologne)

  • Bettina Rockenbach

    (University of Cologne)

  • Lukas M. Wenner

    (University of Cologne)

Abstract

We experimentally study competitive markets with socially responsible production. Our main focus is on the producers’ decision whether or not to reveal the degree of social responsibility of their product. Compared to two benchmark cases where either full transparency is enforced or no disclosure is possible, we show that voluntary and costless disclosure comes close to the full transparency benchmark. However, when the informational content of disclosure is imperfect, social responsibility in the market is significantly lower than under full transparency. Our results highlight an important role for transparent and standardized information about social externalities.

Suggested Citation

  • Sören Harrs & Bettina Rockenbach & Lukas M. Wenner, 2022. "Revealing good deeds: disclosure of social responsibility in competitive markets," Experimental Economics, Springer;Economic Science Association, vol. 25(5), pages 1349-1373, November.
    • Handle: RePEc:kap:expeco:v:25:y:2022:i:5:d:10.1007_s10683-022-09752-z
    DOI: 10.1007/s10683-022-09752-z
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    More about this item

    Keywords

    Social responsibility; Market experiments; Disclosure; Consumer behavior;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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