Working Paper: NBER ID: w30576
Authors: Emanuele Colonnelli; Niels Joachim Gormsen; Timothy McQuade
Abstract: We study how perceptions of corporate responsibility influence policy preferences and the effectiveness of corporate communication when agents have imperfect memory recall. Using a new large-scale survey of U.S. citizens on their support for corporate bailouts, we first establish that the public demands corporations to behave better within society, a sentiment we label “big business discontent.” Using random variation in the order of survey sections and in the exposure to animated videos, we then show that priming respondents to think about corporate responsibility lowers the support for bailouts. This finding suggests that big business discontent influences policy preferences. Furthermore, we find that messages which paint a positive picture of corporate responsibility can “backfire,” as doing so brings attention to an aspect on which the public has negative views. In contrast, reframing corporate bailouts in terms of economic trade-offs increases support for the policy. We develop a memory-based model of decision-making and communication to rationalize these findings.
Keywords: Corporate Responsibility; Policy Preferences; Bailouts; Memory Recall; Public Sentiment
JEL Codes: D63; D72; G34; G38; M14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negative memories regarding corporate behavior (M14) | interference with recall of positive corporate actions (G34) |
| increased salience of corporate responsibility (M14) | decreased support for bailouts (G28) |
| framing of corporate responsibility (G38) | policy preferences (D72) |
| positive messaging about corporate responsibility (M14) | reduced support for bailouts (G28) |