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Fairness, Consumer Consciousness and the Welfare of Less Developed Countries

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  • Immordino Giovanni

    ()
    (Università di Salerno and CSEF)

Abstract

Activist organizations, interest groups, unions and media reveal information about labour standards. In a world where some consumers are not self-interested, the price of a product made by a multinational enterprise and the latter's location and production decisions depend on the difference in labour standards between developed and less developed countries. We study the effect of an increase in the fraction of informed inequity-averse consumers on the behaviour of multinational frms, on the equilibrium level of labour standards and on the welfare of workers in the less developed countries. An increase in activism deteriorates labour practices and decreases welfare.

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Bibliographic Info

Article provided by De Gruyter in its journal Global Economy Journal.

Volume (Year): 8 (2008)
Issue (Month): 1 (February)
Pages: 1-21

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Handle: RePEc:bpj:glecon:v:8:y:2008:i:1:n:7

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Cited by:
  1. Fanelli, Domenico, 2010. "The Role of Socially Concerned Consumers in the Coexistence of Ethical and Standard Firms," MPRA Paper 20117, University Library of Munich, Germany.
  2. Gani Aldashev & Michela Limardi & Thierry Verdier, 2013. "Watchdogs of the Invisible Hand: NGO Monitoring, Corporate Social Responsibility, and Industry Equilibrium," Working Papers 1404, University of Namur, Department of Economics.

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