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A Theory of Consumer Boycotts under Symmetric Information and Imperfect Competition

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Robert Innes

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Abstract

This article models strategic interactions between non-identical duopolistic firms and a public interest/environmental organisation (EO) that promotes 'green' production practices by threatening consumer boycotts against 'brown' producers. The article describes when boycotts are deterred by prior firm commitments to be 'green' and, also when a boycott arises in equilibrium, despite symmetric information. When a boycott arises, it is either a small persistent boycott against the 'small firm' in the industry, or a large transitory boycott against the 'large firm' in the industry that prompts the target firm to accede to the boycott demands quickly. Copyright 2006 Royal Economic Society.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0297.2006.01084.x
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Publisher Info
Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 116 (2006)
Issue (Month): 511 (04)
Pages: 355-381
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Handle: RePEc:ecj:econjl:v:116:y:2006:i:511:p:355-381

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  1. Aleix Calveras & Juan José Ganuza & Gerard Llobet, 2005. "Regulation and Opportunism: How Much Activism Do We Need?," Economics Working Papers 935, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
  2. Thomas P. Lyon & John W. Maxwell, 2007. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Working Papers 2007-16, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy. [Downloadable!]
  3. Thomas P. Lyon & John W. Maxwell, 2006. "Greenwash: Corporate Environmental Disclosure under Threat of Audit," Working Papers 2006-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy. [Downloadable!]
  4. Amihai Glazer & Vesa Kanniainen & Panu Poutvaara, 2008. "Informational Benefits of International Environmental Agreements," Working Papers 070818, University of California-Irvine, Department of Economics. [Downloadable!]
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