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On the scope of externalities in experimental markets

Author

Listed:
  • Vanessa Valero

    (UZH - Universität Zürich [Zürich] = University of Zurich)

  • Roberto Weber

    (UZH - Universität Zürich [Zürich] = University of Zurich)

  • Björn Bartling

    (UZH - Universität Zürich [Zürich] = University of Zurich)

Abstract

We study how the scope of negative externalities from market activity affects the willingness of market actors to exhibit social responsibility. Using the laboratory experimental paradigm introduced by Bartling et al. (Q J Econ 130(1):219–266, 2015), we compare the voluntary internalization of negative social impacts by market actors in cases where the negative externality is diffused among many subjects or is concentrated on a single subject. We (1) replicate earlier results demonstrating substantial degrees of market social responsibility and (2) find that the willingness of market actors to act pro-socially is only slightly affected by whether the impacts are concentrated or diffused.

Suggested Citation

  • Vanessa Valero & Roberto Weber & Björn Bartling, 2017. "On the scope of externalities in experimental markets," Post-Print hal-04739458, HAL.
    • Handle: RePEc:hal:journl:hal-04739458
    Note: View the original document on HAL open archive server: https://hal.science/hal-04739458v1
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    References listed on IDEAS

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    1. Michael Kirchler & Jürgen Huber & Matthias Stefan & Matthias Sutter, 2016. "Market Design and Moral Behavior," Management Science, INFORMS, vol. 62(9), pages 2615-2625, September.
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    4. Danz, David & Engelmann, Dirk & Kübler, Dorothea, 2012. "Do Legal Standards Affect Ethical Concerns of Consumers? An Experiment on Minimum Wages," Working Papers 12-03, University of Mannheim, Department of Economics.
    5. Plott, Charles R, 1983. "Externalities and Corrective Policies in Experimental Markets," Economic Journal, Royal Economic Society, vol. 93(369), pages 106-127, March.
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