Changes
Jump to navigation
Jump to search
Baron Diermeier (2006) - Strategic Activism And Nonmarket Strategy (view source)
Revision as of 19:17, 28 February 2011
, 19:17, 28 February 2011→Why Are Campaigns Negative?
Campaigns are most likely to be negative because;
*There is an industry effect - rewards alone would increase the profit of the firm, whereas harm decreases them. Therefore harm acts to discourage investment in the industry, which reduces the scale of the industry and hence the objectional practises
*There is an endogenous selection effect - targets are selected by the responsiveness <math>p\,</math>, and both the demand and the harm are increasing in <math>p\,</math>, whereas effect on <math>r^*\,</math> may be decreasing in <math>p\,</math>is ambiguous
*Rewards may be costly to provide (i.e. <math>\alpha\,</math> maybe high)
*Harm can induce proactive self-regulation (see later)
===Target Selection===
