Revealed-preference study of the impact of narratives and conceptual frames: evidence from a negative externality laboratory experiment

Our proposed work builds from Bartling, Weber, and Yao (2015) by using an RCT to examine choices in a laboratory market in which we vary the way a negative externality associated with a transaction is characterized. Like Bartling et al. (2015), we use a fictious product in a laboratory setting with real stakes and real impacts on a bystander. In the experiment by Bartling et al. (2015), consumers can choose between a socially responsible product and a product that produces a negative externality for a bystander. The authors find that people are willing to forgo personal benefit to choose a socially responsible product. Our protocol differs from Bartling et al. (2015) in some important ways. First, instead of choosing which of two products to sell, the seller can choose to sell a product that has an external cost for a bystander, or they can refuse to produce a good for sale. Similarly, buyers can choose to purchase the externality-producing good or refrain from making a purchase. This design simulates a context in which there is no socially responsible substitute on the market. Experimental conditions in the study vary the conceptual frame of the negative externality. We examine whether subjects’ willingness to sell and buy this “unfair” product is impacted by the conceptual frame.