Can Collusion Promote Corporate Social Responsibility? Evidence from the Lab

Tinbergen Institute Discussion Paper 2019-034/VII

44 Pages Posted: 30 May 2019 Last revised: 18 Nov 2019

See all articles by Francisco Gomez-Martinez

Francisco Gomez-Martinez

Universidad Carlos III Madrid

Sander Onderstal

University of Amsterdam; Tinbergen Institute

Maarten Pieter Schinkel

University of Amsterdam - Department of Economics; Tinbergen Institute

Multiple version iconThere are 2 versions of this paper

Date Written: November 12, 2019


Competition has been argued to erode socially responsible behavior in markets, suggesting that allowing cartel agreements among firms may promote public interest objectives. We test this idea in a laboratory experiment. Participants playing the role of firms choose between offering a ‘fair’ and an ‘unfair’ good to a consumer participant. When the unfair good is traded, a negative externality is imposed on a third party. We vary whether or not the firms are allowed to coordinate on the type of good they sell – while remaining in price competing. We find that the opportunity to coordinate leads to more coordinated equilibria, but has no significant impact on the fraction of fair goods traded on the market. Instead it polarizes: more of the same good, fair or unfair, is offered in coordination. Irrespective of whether quality coordination between firms is allowed, participants are more likely to trade the fair good, the stronger their third-party preferences are. These findings suggest that both consumer and managerial values are more important drivers of socially responsible behavior than opportunities for firms to coordinate their corporate social responsibility (CSR) activities. We highlight implications for competition policy, where cartels may be exempted on CSR grounds.

Keywords: Collusion, Corporate Social Responsibility, Public Interest, Laboratory Experiment, Competition Policy

JEL Classification: L41, C92, M14

Suggested Citation

Gomez-Martinez, Francisco and Onderstal, Sander and Schinkel, Maarten Pieter, Can Collusion Promote Corporate Social Responsibility? Evidence from the Lab (November 12, 2019). Tinbergen Institute Discussion Paper 2019-034/VII, Available at SSRN: or

Francisco Gomez-Martinez (Contact Author)

Universidad Carlos III Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
+34694481107 (Phone)


Sander Onderstal

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA

Maarten Pieter Schinkel

University of Amsterdam - Department of Economics ( email )

Roetersstraat 11
1018 WB Amsterdam
+31 20 525 7132 (Phone)
+31 20 525 5318 (Fax)

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS

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