Tuesday, March 01, 2016

host communities, employees, and customers become increasingly concerned about sustainability, how can firms signal their commitment to a sustainable enterprise? It seems that false signaling may be of particular concern in this situation, so how can firms leverage signal costs and penalty costs to differentiate themselves from lower quality (less sustainably minded) firms? As firms obtain feedback on the importance of sustainability from different and possibly competing stakeholders, such as government in the form of regulations and consumers in the form of behavior, how do they differentially adjust their signaling activity?

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