Selfish Corporations

Emanuele Colonnelli, Niels Gormsen and Tim McQuade

The Review of Economic Studies, 2024, vol. 91, issue 3, 1498-1536

Abstract: We study how perceptions of corporate responsibility influence policy preferences and the effectiveness of corporate communication when agents have imperfect memory recall. Using a new large-scale survey of U.S. citizens on their support for corporate bailouts, we first establish that the public demands corporations to behave better within society, a sentiment we label “big business discontent.” Using random variation in the order of survey sections and in the exposure to animated videos, we then show that priming respondents to think about corporate responsibility lowers the support for bailouts. This finding suggests that big business discontent influences policy preferences. Furthermore, we find that messages which paint a positive picture of corporate responsibility can “backfire,” as doing so brings attention to an aspect on which the public has negative views. In contrast, reframing corporate bailouts in terms of economic tradeoffs increases support for the policy. We develop a memory-based model of decision-making and communication to rationalize these findings.

Keywords: Big business; Corporations; Information Experiment; Economic Policies; ESG; Beliefs; Bailouts (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Working Paper: Selfish Corporations (2022)
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