To Buy or Not to Buy? An Experimental Study of Consumer Boycotts in Retail Markets
AbstractWe experimentally investigate how firms and consumers react to a sudden cost increase in a competitive retail market. We compare two conditions which exclusively differ with respect to how difficult it is to organize and enforce boycotts. We find that cost increases translate into sudden price increases, and that these frequently trigger consumer boycotts. However, consumer boycotts are un-successful in holding down market prices even if collective action problems are completely eliminated. While consumer boycotts do not increase consumer rent, they reduce firm profits and market efficiency. Consumer boycotts apparently serve to punish firms for seemingly unfair price increases.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2002 with number 2002-13.
Length: 35 pages
Date of creation: May 2002
Date of revision:
Posted-offer markets; consumer boycotts; collective action;
Other versions of this item:
- Jean-Robert Tyran & Dirk Engelmann, 2005. "To Buy or Not to Buy? An Experimental Study of Consumer Boycotts in Retail Markets," Economica, London School of Economics and Political Science, vol. 72(285), pages 1-16, 02.
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ernst Fehr & Simon Gaechter, 1999.
"Cooperation and Punishment in Public Goods Experiments,"
CESifo Working Paper Series
183, CESifo Group Munich.
- Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
- Ernst Fehr & Simon Gaechter, . "Cooperation and Punishment in Public Goods Experiments," IEW - Working Papers 010, Institute for Empirical Research in Economics - University of Zurich.
- Ted Bergstrom, 2001.
"Free Labor for Costly Journals?,"
- Bergstrom, Ted, 2001. "Free Labor for Costly Journals?," University of California at Santa Barbara, Economics Working Paper Series qt5jc0893p, Department of Economics, UC Santa Barbara.
- repec:fth:calaec:16-01 is not listed on IDEAS
- Franciosi, Robert, et al, 1995. "Fairness: Effect on Temporary and Equilibrium Prices in Posted-Offer Markets," Economic Journal, Royal Economic Society, vol. 105(431), pages 938-50, July.
- Kachelmeier, Steven J. & Limberg, Stephen T. & Schadewald, Michael S., 1991. "Fairness in markets: A laboratory investigation," Journal of Economic Psychology, Elsevier, vol. 12(3), pages 447-464, September.
- Sen, Sankar & Gurhan-Canli, Zeynep & Morwitz, Vicki, 2001. " Withholding Consumption: A Social Dilemma Perspective on Consumer Boycotts," Journal of Consumer Research, University of Chicago Press, vol. 28(3), pages 399-417, December.
- Bradley J. Ruffle, 2000. "Some factors affecting demand withholding in posted-offer markets," Economic Theory, Springer, vol. 16(3), pages 529-544.
- Miller, Kenneth E & Sturdivant, Frederick D, 1977. " Consumer Responses to Socially Questionable Corporate Behavior: An Empirical Test," Journal of Consumer Research, University of Chicago Press, vol. 4(1), pages 1-7, June.
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
- Bruno S. Frey & Matthias Benz & Alois Stutzer, 2003.
"Introducing Procedural Utility: Not only What, but also How Matters,"
CREMA Working Paper Series
2003-02, Center for Research in Economics, Management and the Arts (CREMA).
- Bruno Frey & Matthias Benz & Alois Stutzer, 2004. "Introducing Procedural Utility: Not Only What, but Also How Matters," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 377-, September.
- Bruno S. Frey & Matthias Benz & Alois Stutzer, . "Introducing Procedural Utility: Not only What, but also How Matters," IEW - Working Papers 129, Institute for Empirical Research in Economics - University of Zurich.
- Konrad, Kai A. & Morath, Florian & Müller, Wieland, 2010.
"Taxation and market power,"
Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism"
SP II 2010-07, Social Science Research Center Berlin (WZB).
- Ana I. Balsa & Michael T. French & Tracy L. Regan, 2013.
"Relative Deprivation and Risky Behaviors,"
Documentos de Trabajo/Working Papers
1304, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
- Georgy Egorov & Bård Harstad, 2013. "Private Politics and Public Regulation," NBER Working Papers 19737, National Bureau of Economic Research, Inc.
- Lisa Bruttel, 2014. "Buyer power in large buyer groups?," TWI Research Paper Series 92, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
- Xiao, Erte & Houser, Daniel, 2009. "Avoiding the sharp tongue: Anticipated written messages promote fair economic exchange," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 393-404, June.
- Yuksel, Ulku & Mryteza, Victoria, 2009. "An evaluation of strategic responses to consumer boycotts," Journal of Business Research, Elsevier, vol. 62(2), pages 248-259, February.
- Hoffmann, Stefan & Müller, Stefan, 2009. "Consumer boycotts due to factory relocation," Journal of Business Research, Elsevier, vol. 62(2), pages 239-247, February.
- Rafael Di Tella & Juan Dubra, 2009.
"Anger and Regulation,"
NBER Working Papers
15201, National Bureau of Economic Research, Inc.
- Alan Hamlin & Colin Jennings, 2009.
"Expressive Political Behaviour: Foundations, Scope and Implications,"
0918, University of Strathclyde Business School, Department of Economics.
- Hamlin, Alan & Jennings, Colin, 2009. "Expressive Political Behaviour: Foundations, Scope and Implications," SIRE Discussion Papers 2009-41, Scottish Institute for Research in Economics (SIRE).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joerg Baumberger).
If references are entirely missing, you can add them using this form.