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SSRN Electronic Journal
Article . 2021 . Peer-reviewed
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Socially Responsible Investment versus Socially Responsible Consumption

Authors: Hendrik Hakenes; Eva Schliephake;

Socially Responsible Investment versus Socially Responsible Consumption

Abstract

To maximize their impact, socially responsible households can invest responsibly (SRI), consume responsibly (SRC), or do both. The key question of this paper is, which mix of SRI and SRC leads to a desired impact with the lowest loss of utility for responsible households. In a closed micro-economic model, we show that both strategies yield a symmetric impact, proportional to the responsible behavior. For the individual household, however, one strategy dominates the other depending on a condition on risk and product parameters. If responsible households can coordinate on socially responsible action, the welfare maximizing action is to completely abstain from consuming and investing in brown production if the negative externality is high. The coordination on "abstaining" becomes more likely the more households are responsible.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
1
Average
Average
Average
bronze