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

Robert Feicht, Veronika Grimm and Michael Seebauer

No 03/2014, FAU Discussion Papers in Economics from Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics

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.

Keywords: Corporate Social Responsibility; Competition; Charitable Giving; Experiment (search for similar items in EconPapers)
JEL-codes: C92 D22 M31 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-exp, nep-ger and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwqwdp:032014

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