Caring or Pretending to Care? Social Impact, Firms' Objectives, and Welfare

• 成果类型: Article
• 署名作者: Fioretti, Michele
• 署名单位: Institut d'Etudes Politiques Paris (Sciences Po)
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/720459
• 发表日期: 2022
• 页码: 2898-2942
• 关键词: BENEFIT CORPORATIONS; 1st-price auctions; field experiment; risk-aversion; nonprofit; incentives; pay; identification; RESPONSIBILITY; COMPETITION

摘要

Many firms claim that social impact influences their strategies. This paper develops a structural model that quantifies social impact as the sum of surpluses to a firm and its stakeholders. With data from a for-profit firm whose prosocial expenditures are measurable and salient to consumers, the analysis shows that the firm spends prosocially beyond profit maximization, thereby increasing welfare substantially. Incentivizing a standard profit-maximizing firm to behave similarly would require subsidies amounting to 58% of its prosocial expenditures, because consumers' willingness to pay is relatively inelastic to prosocial expenses. Therefore, social impact resembles a self-imposed welfare-enhancing tax with limited pass-through.