Economic competition with environmental and labor standards
Abstract
This thesis examines three unrelated market-based policies. The first topic is the “green marketing” phenomenon, whereby producers attempt to differentiate their products based on environmental quality. “Buying green” has two main beneficial components: the benefit accruing to the individual consumer, and the benefit accruing to the rest of society as a whole. Laboratory experiments allow me to control for the portion of the benefit accruing to the individual, in order to conclude that, in this particular framework, the benefits accruing to other individuals is not internalized by consumers. The second topic of investigation is the “anti-sweatshop” movement, specifically the effects of successful demands for increased wages for workers in low-income countries. I build a 2-country international trade model with a continuum of firms, adding a subsistence sector to the “Southern” country. Within this framework, I examine the results of one targeted Southern firm choosing to raise wages, and then expand the analysis to a subset of Southern firms. I find that activists may enjoy success in targeting one firm, but that the analysis is much more complex when multiple firms are targeted. The last topic of investigation is an experimental analysis of the laws governing litigation practices in the United States, Great Britain, and continental Europe. Great Britain's system forces the losing party of a court case to pay the winner's legal fees as well as their own. This provides an incentive for both parties to spend more, and results in higher fees per case. However, when subjects are allowed to decide whether or not to enter (whether or not to bring their case to court), the hefty fee-shifting mechanism in the British system results in a lower percentage of cases tried. The United States system has a higher percentage of cases tried, both in the field and in the laboratory, since the average fees per case are lower.
Degree
Ph.D.
Advisors
Cason, Purdue University.
Subject Area
Economics
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