Template-Type: ReDIF-Paper 1.0
Author-Name: Goytom Abraha Kahsay
Author-Name-First: Goytom Abraha
Author-Name-Last: Kahsay
Author-Email: goytom@ifro.ku.dk
Author-Workplace-Name: Department of Food and Resource Economics, University of Copenhagen
Author-Name: Laura Mørch Andersen
Author-Name-First: Laura Mørch
Author-Name-Last: Andersen
Author-Email: la@ifro.ku.dk
Author-Workplace-Name: Department of Food and Resource Economics, University of Copenhagen
Author-Name: Lars Gårn Hansen
Author-Name-First: Lars Gårn
Author-Name-Last: Hansen
Author-Email: lgh@ifro.ku.dk
Author-Workplace-Name: Department of Food and Resource Economics, University of Copenhagen
Title: Price reactions when consumers are concerned about pro-social reputation 
Abstract: In this paper, we propose a reputation-signalling model of demand for consumer goods containing pro-social characteristics such as a ‘fair trade’ or ‘organic’ certification. We show that reputation signalling can reverse price reactions resembling the crowding-out of pre-existing motives for pro-social behavior seen in situations of volunteering and charitable giving. Finally, using a unique combination of questionnaire and purchase panel data, we present evidence of such reputation-driven reversal of price reactions in the Danish market for organic milk.
Length: 58 pages
Creation-Date:  2014-10
File-URL: http://okonomi.foi.dk/workingpapers/WPpdf/WP2014/IFRO_WP_2014_09.pdf
File-Format: Application/pdf
Number: 2014/09
Classification-JEL: D03, D11, D12, D64, D82, D51
Keywords: net-crowding out; reversed price reactions; pro-social reputation; reputation signalling; consumer goods
Handle: RePEc:foi:wpaper:2014_09