Revealing good deeds: disclosure of social responsibility in competitive markets

Sören Harrs (), Bettina Rockenbach () and Lukas M. Wenner ()
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Sören Harrs: University of Cologne
Bettina Rockenbach: University of Cologne
Lukas M. Wenner: University of Cologne

Experimental Economics, 2022, vol. 25, issue 5, No 3, 1349-1373

Abstract: Abstract We experimentally study competitive markets with socially responsible production. Our main focus is on the producers’ decision whether or not to reveal the degree of social responsibility of their product. Compared to two benchmark cases where either full transparency is enforced or no disclosure is possible, we show that voluntary and costless disclosure comes close to the full transparency benchmark. However, when the informational content of disclosure is imperfect, social responsibility in the market is significantly lower than under full transparency. Our results highlight an important role for transparent and standardized information about social externalities.

Keywords: Social responsibility; Market experiments; Disclosure; Consumer behavior (search for similar items in EconPapers)
JEL-codes: C92 D62 D90 M14 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10683-022-09752-z

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