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On the scope of externalities in experimental markets

Published online by Cambridge University Press:  14 March 2025

Björn Bartling ,
Vanessa Valero  and
Roberto Weber
Björn Bartling*
Affiliation:
Department of Economics, University of Zurich, Blümlisalpstrasse 10, 8006 Zurich, Switzerland
Vanessa Valero*
Affiliation:
Department of Economics, University of Zurich, Blümlisalpstrasse 10, 8006 Zurich, Switzerland
Roberto Weber*
Affiliation:
Department of Economics, University of Zurich, Blümlisalpstrasse 10, 8006 Zurich, Switzerland
*
[email protected]
[email protected]
[email protected]
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Abstract

We study how the scope of negative externalities from market activity affects the willingness of market actors to exhibit social responsibility. Using the laboratory experimental paradigm introduced by Bartling et al. (Q J Econ 130(1):219–266, 2015), we compare the voluntary internalization of negative social impacts by market actors in cases where the negative externality is diffused among many subjects or is concentrated on a single subject. We (1) replicate earlier results demonstrating substantial degrees of market social responsibility and (2) find that the willingness of market actors to act pro-socially is only slightly affected by whether the impacts are concentrated or diffused.

Keywords

Negative externalitiesScope of externalitiesSocial responsibilityMarket experiments

JEL classification

D62: Externalities M14: Corporate Culture • Diversity • Social Responsibility C92: Laboratory, Group Behavior
Type
Original Paper
Information
Experimental Economics , Volume 22 , Issue 3: Special Issue in Honor of Charles R. Plott , September 2019 , pp. 610 - 624
Copyright
Copyright © 2017 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-017-9549-9) contains supplementary material, which is available to authorized users.

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