Consuming a product does not (necessarily) reveal the environmental damage it may cause. In terms of environmental damage, most goods are credence goods. Therefore, advertising and pricing rarely can transmit such information effectively to consumers. This article considers the scope with which...

We present a theory that explains the prevalence of consumer boycotts. In our model, a firm does not know how concerned consumers are about the firm's misconduct. Because it is only optimal for the firm to alter its behavior if consumers are very concerned, consumers have an incentive to...