Signaling Corporate Social Responsibility: Third‐Party Certification versus Brands |
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Authors: | Fabrice Etilé Sabrina Teyssier |
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Institution: | 1. Paris School of Economics, Paris, FranceAlso affiliated with French National Institute for Agricultural Research (INRA), ALISS.;2. French National Institute for Agricultural Research (INRA), ALISS, France |
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Abstract: | Corporate social responsibility (CSR) is a credence attribute of products, which can be signaled either through a label certified by a third party, or via unsubstantiated claims used as part of a brand‐building strategy. We use an experimental posted‐offer market with sellers and buyers to compare the impact of these signaling strategies on market efficiency. Only third‐party certification gives rise to a separating equilibrium and an increase in CSR investments. Unsubstantiated claims can generate a halo effect on consumers, whereby the latter are nudged into paying more for the same level of CSR investments by firms. |
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Keywords: | Claim halo effect label market experiment social preferences C92 D82 L15 M14 |
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