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Consumers' Activism: the Facebook boycott of Cottage Cheese

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  • Hendel, Igal E
  • Lach, Saul
  • Spiegel, Yossi

Abstract

We study a consumer boycott on cottage cheese that was organized in Israel on Facebook in the summer of 2011 following a steep increase in prices after price controls were lifted in 2006. The boycott led to an immediate decline in prices which stayed low more than three years after the boycott. We find that (i) demand at the start of the boycott, at the new low prices, would have been 30% higher but for the boycott, (ii) own price elasticities and especially cross price elasticities increased substantially after the boycott, and (iii) post-boycott prices are substantially below the levels implied by the post-boycott elasticities of demand, suggesting that firms lowered prices due to fears of the boycott spreading to other products, of new price controls, and of possibly class action law suits.

Suggested Citation

  • Hendel, Igal E & Lach, Saul & Spiegel, Yossi, 2015. "Consumers' Activism: the Facebook boycott of Cottage Cheese," CEPR Discussion Papers 10460, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10460
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    References listed on IDEAS

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    Cited by:

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    2. Cuadras-Morató Xavier & Raya Josep Maria, 2016. "Boycott or Buycott?: Internal Politics and Consumer Choices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 185-218, January.

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    More about this item

    Keywords

    consumer boycott; price elasticities; social media;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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