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

103 Pages Posted: 2 Dec 2020 Last revised: 6 Feb 2023

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

Multiple version iconThere are 2 versions of this paper

Date Written: February 5, 2023

Abstract

We study how perceptions of corporate responsibility influence policy preferences and the effectiveness of corporate communication when agents have imperfect memory recall. Using a new large-scale survey of U.S. citizens on their support for corporate bailouts, we first establish that the public demands corporations to behave better within society, a sentiment we label “big business discontent.” Using random variation in the order of survey sections and in the exposure to animated videos, we then show that priming respondents to think about corporate responsibility lowers the support for bailouts. This finding suggests that big business discontent influences policy preferences. Furthermore, we find that messages which paint a positive picture of corporate responsibility can “backfire,” as doing so brings attention to an aspect on which the public has negative views. In contrast, reframing corporate bailouts in terms of economic trade-offs increases support for the policy. We develop a memory-based model of decision-making and communication to rationalize these findings.

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 (February 5, 2023). 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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