Experimental Design Details
The experiment will be run on Prolific.com (https://www.prolific.com/) - a platform to run online experiments.
In STEP 1, we use a vignette approach organized into two parts:
• A description of a general situation common to both scenarios and
• A specific frame upon which the individual is asked to take a stay or exit decision. As illustrated below, the frame is positive for STAY in scenario 1 and negative for STAY in scenario 2.
General situation (used for both scenarios):
Imagine that you are in a leading position in the company Alpha, wholly owned by a US firm, that operates in country X. Alpha's profits account for about 2% of the parent firm's profits. Leading media outlets in the US report and provide evidence that the autocratic government of X is accelerating human rights abuses in a province with dominant ethnic minorities. These reports suggest that Alpha would be complicit with the human rights abuses because of its presence in the country, signaling support for the 'dictatorial' regime in the country. Your company has a major manufacturing and sales operation in X.
SCENARIO 1: (positive (gain) frame)
Your crisis management team proposes that staying in the country would result in an increase (gain) of 2% in global profits but would harm the company's global reputation. On the other hand, exit from the country would avoid harm to the company's global reputation but would forego the increase of 2% in global profits. Would you
- STAY
- EXIT
SCENARIO 2: (negative (loss) frame)
Your crisis management team proposes that staying in the country would avoid a decrease (loss) of 2% in global profits but would harm the company's global reputation. On the other hand, exit from the country would result in a decrease of 2% in global profits but avoid harm to the company's global reputation. Would you
- STAY
- EXIT
In STEP 2,
• Individuals remained allocated to the positive and negative framing groups of STEP 1. Still, each group is split into two sub-groups depending on whether individuals have opted to STAY or EXIT in STEP 1.
• A vignette approach continues to be used in STEP 2. In this step, the vignette provides additional information, differentiated based on the individual's decisions in STEP 1.
Thus, for individuals exposed to a specific type of framing in STEP 1 (positive or negative), there will be two scenarios:
— scenario 1 for those that opted to "STAY",
— scenario 2 for those that opted to "EXIT".
• The choice set in STEP 2 is:
— REVERSE the initial decision,
— ENGAGE with the actor exercising the pressure,
— EXPLAIN to the actor exercising the pressure,
— IGNORE the pressure.
POSITIVE FRAMING IN STEP 1
SCENARIO 1 - INDIVIDUALS WHO HAVE CHOSEN "STAY" IN STEP 1:
You have decided to STAY. Now, a coalition of NGOs launches a media campaign highlighting the association of companies from your country, including Alpha, with human rights abuses allegedly in factories and threatening to escalate the campaign to a product boycott with substantial repercussions on the company's reputation. What actions would you take?
- Reverse the initial decision: Exit the country.
- Engage with the NGO claim: Ask an independent auditor to investigate the claim.
- Explain your choice to stay: Publicize the company's global labor standards, which prohibit the type of abuses allegedly occurring.
- Ignore the NGO claim: Do nothing.
SCENARIO 2 INDIVIDUALS WHO HAVE CHOSEN "EXIT" IN STEP 1:
You have decided to EXIT. Now, an investor protection activist group issued a report highlighting the potential financial losses that occurred because firms such as Alpha are exiting from country X, threatening a no-confidence motion against the board at the next shareholder annual general meeting. What actions would you take?
- Reverse the initial decision: Re-enter the country.
- Engage with the shareholder claim: Ask an independent company to serve as a trade intermediary to serve the market.
- Explain your choice to exit: Release a media statement explaining why you have exited the country.
- Ignore the NGO claim: Do nothing.
NEGATIVE FRAMING IN STEP 2
SCENARIO 1 - INDIVIDUALS WHO HAVE CHOSEN "STAY" IN STEP 1:
You have decided to STAY. Now, a coalition of NGOs launches a media campaign highlighting the association of companies from your country, including Alpha, with human rights abuses allegedly in factories and threatening to escalate the campaign to a product boycott with substantial repercussions on the company's reputation. What actions would you take?
- Reverse the initial decision: Exit the country.
- Engage with the NGO claim: Ask an independent auditor to investigate the claim.
- Explain your choice to stay: Publicize the company's global labor standards, which prohibit the type of abuses allegedly occurring.
- Ignore the NGO claim: Do nothing.
SCENARIO 2 INDIVIDUALS WHO HAVE CHOSEN "EXIT" IN STEP 1:
You have decided to EXIT. Now, an investor protection activist group issued a report highlighting the potential financial losses that occurred because firms such as Alpha are exiting from country X, threatening a no-confidence motion against the board at the next shareholder annual general meeting. What actions would you take?
- Reverse the initial decision: Re-enter the country.
- Engage with the shareholder claim: Ask an independent company to serve as a trade intermediary to serve the market.
- Explain your choice to exit: Release a media statement explaining why you have exited the country.
- Ignore the NGO claim: Do nothing.