An experimental study of corporate social responsibility through charitable giving in Bertrand markets
AbstractWe experimentally investigate a Bertrand market with homogenous goods where sellers may behave socially responsible by donating a share of their profits to an existing non-profit organization. In our experiment, we find that this Corporate Social Responsibility (CSR) component is used independent of its credibility. However, market outcomes in terms of prices and profits do neither significantly differ with respect to the credibility of the CSR component nor in comparison to a market without the availability of CSR components. Moreover, prices have the main impact on purchase decisions while higher donations only affect purchase decisions when they are credible and price differences are negligible. We conclude that competition severely limits the possibility to attract customers with CSR components. Actual donations are small and the burden induced by the CSR components is shifted partly to the buyers resulting in equal profits in all treatments. --
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Bibliographic InfoPaper provided by Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW) in its series IWQW Discussion Paper Series with number 03/2014.
Date of creation: 2014
Date of revision:
Corporate Social Responsibility; Competition; Charitable Giving; Experiment;
Find related papers by JEL classification:
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-11 (All new papers)
- NEP-EXP-2014-04-11 (Experimental Economics)
- NEP-GER-2014-04-11 (German Papers)
- NEP-IND-2014-04-11 (Industrial Organization)
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