1. Authors: Mark Pigors and Bettina Rockenbach (2016) Presentation of Philippe Tzvetkov

2. Introduction I. Experiment design II. Results To take away (conclusion)

3.  Consumer social responsibility: “the conscious and deliberate choice to make certain consumption choices based on personal and moral beliefs” Devinney et al. (2006)

4. Child Labour in Nike Suicide in Foxconn (chinese factory) After the fire in the Tazreen Fashions factory (Bangladesh)

5.  Three types of actor: Manager (=firm), consumer and worker  Wage doesn’t influence production  Workers = Bystander

6.  Payoff:

7. X (w,p-w,30- p) X (w,-w,0) AcceptRefuse Monopoly 1) 2) Duopoly 1) 2) XY Choose 1 Manager, 1 Worker and 1 Consumers 2 Managers, 2 Workers and 2 Consumers 30 repetitions

8. ◦ Monopoly: No competition Firm owns the “market power” Ex: Trendy Smartphone, fashionable sneakers ◦ Duopoly: Competition Consumers owns the “market power” Ex: Coffee, basic T-shirt

9. - Baseline: No information about the wage - Full Info: Consumers know exactly the wage Imperfect Information: - Choice: Consumers have the choice to know or not the wage - Label: the firm can buy a label which certifies a wage equal to or bigger than 4 - Face: Workers can communicate directly their satisfaction to the customer

10. ChoiceLabel Face

11.  Hypothesis: Information-treatment effect Wages: Baseline < Choice, Label, Face < Full Info

12.  5x2 features

13. No Competion

15. No competition

16.  1 st Conclusion: NO competition - No significantly influence on the wage of the information - Consumer care only about the price - Social responsibility decreases manager’s profit - BUT workers have positive wage

18. Competition and manager’s profit

19.  2: Competition - Information treatment Face, Choice and Full Info increase significantly the wage compared to Baseline and Label. - Consumers care about the wage but they care more about the price - The socially responsible production could increase the manager’s profit

20.  The treatment Face is very strong and represent the direct communication of workers to consumers (trough mass media, demonstrations, strikes)  The market form changes the socially responsible cost of the consumer. Banning a product is too costly in Monopoly but not in competitive environment where consumers can find a substitute with higher social responsability