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Private Politics and Private Policy: A Theory of Boycotts

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  • Baron, David P.

    (Stanford U)

Abstract

Pubic policies such as reguation, antitrust, and international trade are the result of public politics--a competition over who gets what with government the arbiter of that competition. Policies are also chosen by private parties without the command or sanction of government. Private policies often result from pressure from interest groups that can be independent of government. Such activity and the responses to it represent private politics--a competition over who gets what that takes place outside the arenas of government. This paper provides a theory of private politics focusing on an activist that generates a boycott to induce a firm to change its policies. The mode consists of two games. In the first members of the public decide when and how much to boycott the firm based on information they receive. A person's action reveals information, which represents a public good, and that person has an incentive to act early so as to ead others to act. In the second game the activist and the firm bargain to settle the boycott, and the settlement represents a private policy. The equilibrium of the games provides an industrial organization of activist groups, their targets, and the issues that attract boycotts.

Suggested Citation

  • Baron, David P., 2002. "Private Politics and Private Policy: A Theory of Boycotts," Research Papers 1766, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:1766
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    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1766.pdf
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    References listed on IDEAS

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    Cited by:

    1. Giat, Yahel, 2019. "A location model for boycotting with an application to kosher certification," European Journal of Operational Research, Elsevier, vol. 273(3), pages 1109-1118.
    2. Glazer, Amihai & Kanniainen, Vesa & Poutvaara, Panu, 2010. "Firms' ethics, consumer boycotts, and signalling," European Journal of Political Economy, Elsevier, vol. 26(3), pages 340-350, September.
    3. Patrice Cassagnard & Tendai Espinosa, 2022. "From boycott to buycott: is activism from the North good for the South?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(4), pages 1107-1135, November.
    4. Gupta, Sonam & Innes, Robert, 2008. "Determinants and Impact of Private Politics: An Empirical Analysis," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6238, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Amihai Glazer & Stef Proost, 2008. "Informational Benefits of International Environmental Agreements," Working Papers 070810, University of California-Irvine, Department of Economics.

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