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An experimental study of corporate social responsibility through charitable giving in Bertrand markets

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  • Feicht, Robert
  • Grimm, Veronika
  • Seebauer, Michael

Abstract

We 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.

Suggested Citation

  • Feicht, Robert & Grimm, Veronika & Seebauer, Michael, 2014. "An experimental study of corporate social responsibility through charitable giving in Bertrand markets," FAU Discussion Papers in Economics 03/2014, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    • Handle: RePEc:zbw:iwqwdp:032014
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    References listed on IDEAS

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    Cited by:

    1. Rockenbach, Bettina & Pigors, Mark, 2015. "Consumer Social Responsibility," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113139, Verein für Socialpolitik / German Economic Association.
    2. Mark Pigors & Bettina Rockenbach, 2016. "Consumer Social Responsibility," Management Science, INFORMS, vol. 62(11), pages 3123-3137, November.
    3. Pigors, Mark & Rockenbach, Bettina, 2016. "The competitive advantage of honesty," European Economic Review, Elsevier, vol. 89(C), pages 407-424.
    4. Mario Biggeri & Domenico Colucci & Nicola Doni & Vincenzo Valori, 2021. "Good deeds, business, and social responsibility in a market experiment," Working Papers - Economics wp2021_14.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

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    More about this item

    Keywords

    Corporate Social Responsibility; Competition; Charitable Giving; Experiment;
    All these keywords.

    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; Personnel Economics - - Marketing and Advertising - - - Marketing

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