Satisfaction and preferences in a legality social dilemma: does corporate social responsibility impact consumers’ behaviour?

Becchetti, Leonardo;Corrado, Germana

;Pelligra, Vittorio;Rossetti, Fiammetta

2020-01-01

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Abstract

We investigate players’ preferences in a multiplayer prisoner's dilemma by comparing results from satisfaction-based and a choice-based approach by means of a laboratory experiment. The experimental design tests the effects of the legality rating frame on consumers’ choice between products from producers labeled by the legality rating and products by unlabeled producers. Both approaches provide strong evidence of preference heterogeneity, with players who cooperate above median being less affected in their choice by monetary payoffs vis-à-vis the public good component. The empirical findings support the hypothesis of our theoretical model that (part of the) players have, in addition to the standard self-interest component, an other-regarding preference argument that is further satisfied in the legality frame plus conformity design. A policy suggestion stemming from our experiment is based on the fact that corporate social responsibility legality frames and culture have a significant effect on an important portion of consumers. These consumers reveal that the often-declared willingness to pay for socially, environmentally and legally responsible features of products is confirmed by actual purchases of more expensive responsible products. Governments should therefore promote the creation of legality rating schemes with well-defined pre-established rules such as in the Italian case.