Model of Consumer Boycotts
Paper (PDF 453 K / 32 pages)
Diermeier and Jan A. Van Mieghem
presents a model of consumer boycotts where the discrete choices
of concerned consumers are represented as a stochastic process.
for the limiting distribution of the process and analyze its
properties. We then discuss how the model relates to game-theoretic
models of collective action and derive an equilibrium selection
result. The type of equilibrium selected depends on the parameters
of the model including the switching costs by boycott participants.
We end by discussing the model's consequences for activist
strategies and targeted firms.
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