BC3. Basque centre for climate change – Klima aldaketa ikergai

Seminar / Mintegia / Seminario
On Fraud and Certification of Corporate Social Responsibility

Lecturer: Dr. Carmen Arguedas
Departamento de Análisis Económico: Teoría Económica e Historia Económica, Universidad Autónoma de Madrid.

Abstract of the paper that will be presented during the Seminar:

We analyze the strategic decision of firms to voluntarily certify corporate social responsibility (CSR) practices in a context where other firms can falsely pretend to besocially responsible. Equilibrium outcomes are crucially determined by consumers' beliefs about the credibility of firms' CSR claims, which depend in turn on the(expected) fines for fraud. First, we show that an increase in such fines extends the likelihood of firms investing in CSR, at the expense of a reduced likelihood ofcertification. Second, fraud only arises when the fines for fraud are at intermediate levels and some CSR firms do not certify their practices. Third, the presence of fraudcomes at a cost for firms by inducing lower equilibrium prices than in settings with honest marketing. Forth, the coexistence of fraud and certification inducesdifferentiation price premia below marginal production costs and certification price premia above marginal certification costs. Lastly, social welfare rises as fines for fraud increase.

Referenced paper:
"On Fraud and Certification of Corporate SocialResponsibility", Carmen Arguedas and Esther Blanco.

If you are interested in attending the Seminar, please register yourself clicking here

[*] Limited capacity. Registration is mandatory

13th June, 12:00, Faculty of Sarriko (Room B.08)

* The Seminar will be in English. / Mintegia ingelesez burutuko da. / El seminario se realizará en inglés.