Selfish Corporations

Chicago Booth Research Paper No. 20-51

Chicago Booth: George J. Stigler Center for the Study of the Economy & the State Working Paper No. 305

Fama-Miller Working Paper

100 Pages Posted: 2 Dec 2020 Last revised: 27 Sep 2021

See all articles by Emanuele Colonnelli

Emanuele Colonnelli

University of Chicago - Booth School of Business

Niels Joachim Gormsen

University of Chicago - Booth School of Business

Timothy McQuade

Stanford University

Date Written: September 8, 2021

Abstract

Motivated by the public debate regarding corporate responsibility, we construct a memory-based cognitive model of decision making to illustrate how corporate and political communication can impact policy preferences. We test the predictions of our model in a new large-scale experimental survey of U.S. citizens on their support for economic policies such as corporate bailouts. We first establish that the public demands corporations to behave better within society, a sentiment we label “big business discontent.” Then, using random variation in the order of survey sections and in the exposure to animated videos, we confirm two key predictions of our model. First, messages, or cues, that prime respondents to think about policy through the lens of corporate responsibility make people more averse to bailouts. Second, attempts to paint a positive public image of big business can actually backfire, as they focus attention on an aspect of the policy decision on which the public has well-established negative views.

Keywords: big business, corporations, information experiment, economic policies, ESG, beliefs, bailouts

JEL Classification: G34,G38, D63, D72, M14

Suggested Citation

Colonnelli, Emanuele and Gormsen, Niels Joachim and McQuade, Timothy, Selfish Corporations (September 8, 2021). Chicago Booth Research Paper No. 20-51, Chicago Booth: George J. Stigler Center for the Study of the Economy & the State Working Paper No. 305, Fama-Miller Working Paper, Available at SSRN: https://ssrn.com/abstract=3738503 or http://dx.doi.org/10.2139/ssrn.3738503

Emanuele Colonnelli (Contact Author)

University of Chicago - Booth School of Business ( email )

HOME PAGE: http://emanuelecolonnelli.com

Niels Joachim Gormsen

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Timothy McQuade

Stanford University ( email )

Stanford, CA 94305
United States

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