Public Discourse Promotes Socially Responsible Behavior

Movements such as Fridays for Future and organizations such as the World Economic Forum support discussions on how consumers and firms can take action to mitigate climate change. Behavioral economists at the University of Zurich have now investigated whether and how such public discourse influences consumer behavior. "We wanted to find out how to increase the market share of socially responsible products," says study author Björn Bartling. "In our experiments, we were able to observe that engaging in public discourse prior to a purchase results in more socially responsible behavior, even if it incurs personal costs."

The researchers conducted three lab experiments, in which close to 2,500 participants in 187 fictitious markets took on the roles of buyers, sellers and third parties who weren't part of trading but still affected by it. They traded goods that varied in their social impact. In all experiments, sellers and buyers could choose between harmful products that cost less to produce but create external harm or responsible products with higher production costs but no external harm. Before making their decision, the participants were able to engage in discussion with each other.

In the experiments, the researchers observed a significant increase in trade with fair products when participants had engaged in different forms of discourse compared to the baseline condition in which there had been no discourse. The only situation that yielded no increase in socially responsible market behavior was when participants were able to avoid discourse altogether. "Our findings illustrate how important active participation in public discourse is for initiating meaningful changes in market behavior," says Bartling.

The experiments were not only carried out in Switzerland but also in China, where, according to previous studies, socially responsible market behavior is less pronounced. In China too, previous engagement in public discourse resulted in a clear increase in market social responsibility. The market share of products traded fairly was at roughly the same level in China as in Switzerland.

Lab studies have their limitations when it comes to measuring the diverse impact of public discourse. Factors such as nationality and differences in income among market participants that may make it more difficult for discourse to yield sustainable agreements were not considered in the study, the authors emphasize. "Nevertheless, our findings provide valuable insights into the mechanisms underlying socially responsible market behavior and show that public discourse has the potential to promote socially responsible behavior," says Bartling.

Literature:

Björn Bartling, Vanessa Valero, Roberto A. Weber, Lan Yao. Public Discourse and socially responsible Market Behavior. American Economic Review, October 2024, DOI: 10.1257/aer.20201361

Prof. Dr. Björn Bartling
University of Zurich
Department of Economics
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