The microeconomics of strategic activism

PhD Ceremony: dhr. A. van der Made, 14.45 uur, Academiegebouw, Broerstraat 5, Groningen

Dissertation: The microeconomics of strategic activism

Promotor(s): prof.dr. J.L. Moraga-González

Faculty: Economics and Business

Contact: Allard van der Made, 06 29 60 2335, vandermade@fusl.ac.be

Interest groups, most notably environmental organizations, increasingly try to influence the behaviour of consumers and firms. They inform consumers about the (alleged) harmful practices of firms, orchestrate consumer boycotts, bring social issues to the public's attention, and lobby firm executives as well as policy makers. Although the impact of such strategic activism on market outcomes is often considerable, the motives of interest groups to engage in strategic activism are poorly understood. Van der Mades’s thesis aims to explain the use of various instruments of strategic activism.

In each chapter a game-theoretic model is developed that sheds light on the use of one particular instrument of strategic activism an interest group might employ. Persuasive advertising, informative advertising, consumer boycotts, and lobbying are considered. It is argued that strategic activism aimed directly at markets is most likely to occur if consumers have (dormant) ‘green preferences’ and firms or consumers lack relevant information about each other. The analyses clarify what kind of markets are the likeliest targets of interest groups, which factors jeopardize an interest group's attempts to alter firm behaviour, and when strategic activism might be a good thing.