slugExternalities and Social Responsibilities
Journal Title: International Journal of Academic Research in Management - Year 2014, Vol 3, Issue 2
Abstract
As this is an explanatory research using a multiple case study method, this research investigated whether ordinary consumer will support a company with negative externalities. From the results of the three case studies, the theories and propositions are supported and literal replication is expected on the propositions. Under the condition of perfect competition with the information flow is free and available to all parties in the market, traditionally, externality is considered as one of the market failure causing Pareto inefficiency. With the buyer will act ethically in the perfect market, the producer with negative externalities will suffer from lower demand such that they will improve the negative externalities impact to public. As such, the externalities issue will be adjusted by the perfect market naturally. The application of Pigouvian taxes and Coase theorem may not be necessary.
Authors and Affiliations
Lok Tak Ming, Jafy
Keywords
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