The pursuit of profit and socially responsible behavior in market exchange : an experimental analysis

Abstract

Enlightened by Bartling, Weber and Yao’s (2015) experimental study on market socially responsible behavior, this paper aims to studies the effect of varying production cost of “externality-free” product on socially responsible behaviors in market setting. We observe persistent positive levels of social responsibility showing in consumers’ and firms’ behaviors even when the production cost of externality-free product goes up. However, higher production cost of fair product drags down the level of social responsibility significantly. In other words, although consumers and firms’ concern about social welfare and their willingness of behaving in socially responsible manners usually emerges naturally, they also concern about their own profit, limiting or even discouraging their willingness of behaving ethically in certain circumstances.