This paper studies socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs mitigates the externality. Our first study, conducted in...

We investigate whether growth in consumer income causes an increased willingness to pay to mitigate negative externalities from consumption. Correlational field evidence suggests a positive relationship between income and social responsibility. To investigate a causal link, we conduct a...

We investigate the causal impact of public discourse on socially responsible market behavior. We conduct laboratory market experiments with products that differ in their production costs and social impact, and provide market actors and impacted third parties with the opportunity to discuss...

This paper gives a game-theoretical treatment of the institutional homogenization of value-oriented firms. It explains why intrinsically motivated, value-oriented firms like non-profits may become similar to for-profit firms in terms of organization and norms. It highlights and explains the...

Nowadays, sustainable management seems more likely to be a guarantee of competitiveness for companies, regardless of their size. Besides offering those strategic opportunities, sustainable management practices also play a significant role in gaining acceptance and legitimacy in the marketplace....

This paper analyzes how social investors evaluate the integrity of social entrepreneurs. Based on an experiment with 40 professionals and 40 students, we investigate how five attributes of the entrepreneur contribute to the assessment of integrity. These attributes are the entrepreneur's...

This paper studies the stability of socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs entirely mitigates the externality. Our data...

We develop a model of relational contracts with moral hazard and asymmetric persistent information about an employee's type. We find that the form of the optimal contract depends on the job characteristics as well as the distribution of employees' talent. Bonus contracts are more likely to be...

The theory of incomplete contracting is rival to that of complete contracting as a frame of reference to understand contractual relationships. Both approaches rest upon diametrically opposed postulates and lead to very different policy conclusions. From a theoretical viewpoint, scrutiny of the...

Ethnic networks are a way of overcoming informal barriers to trade such as information costs, risk, and uncertainty by building trust and by substituting for the difficulty of enforcing contracts internationally. We study networks which emerge from the interaction (i) between migrants and...