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G202 Final > Topics 6-8 > Flashcards

Topics 6-8 Flashcards

1
Q

What are 3 examples of NGOs?

A
  • Greenpeace
  • Rainforest Action Network (RAN)
  • Sierra Club
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2
Q

Why are there more NGO campaigns? (4 reasons)

A
  • Communication costs decreasing
  • Public trust in corporations is declining
  • Government bureaucracy is getting thicker
  • Businesses are becoming more global
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3
Q

What is “private politics?”

A

Direct interactions between firms and NGOs

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4
Q

What are the 4 normal political issue stages?

A
  1. Development
  2. Politicization
  3. Legislative
  4. Implementation
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5
Q

How is the legislative phase replaced in private politics?

A

NGOs make direct demands on firms (e.g., boycotts/negative PR or PR endorsements/funding)

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6
Q

How is the implementation stage replaced in private politics?

A

Resolution of the NGO-firm dispute

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7
Q

What characterizes a good target for a NGO campaign?

A
  • Brand name
  • Leadership in industry
  • Consumer product (customer-facing)
  • Low switching costs
  • ‘Worst offender’ (sometimes)
  • Interest in issue in past
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8
Q

What is strategic sustainability?

A

When firms incorporate sustainable business ventures in an effort to increase profits.

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9
Q

Why would a firm work to gain strategic sustainability?

A
  • Improve internal efficiencies
  • First mover advantage w/ industry technology
  • Manage regulatory risks
  • Manage growing social risks (*cough, NGOs)
  • Enhance brand equity and corporate reputation
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10
Q

What are external damages?

A

A firm’s production imposes costs on a third party without their consent

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11
Q

What are 5 incentive mechanisms for firms to “go green?”

A
  • Government taxation
  • Tradable pollution permits
  • Assign accountability for waste
  • Subsidize green technology
  • Green NGO incentives and pressures
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12
Q

What is the theory behind tradable pollution permits?

A

The government issues pollution permits that pertain to a permissible level of pollution and then government lets the firms trade (or buy/sell) the permits as needed.

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13
Q

What are 2 assumptions of the pollution permit model?

A
  • One unit of output produces one unit of pollution (Q = Pollution)
  • Marginal Abatement Costs (MAC) are measured as lost profit from decreasing output to reduce pollution (if no other technology is available)
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14
Q

What are 4 nice features of tradable pollution permits?

A
  • Overall level of pollution will decrease as # of permits is decreased over time.
  • More permits go to firms who value them the most
  • Low abatement cost firms can gain profits by selling unused pollution permits
  • Environmental groups can buy permits to reduce pollution more
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15
Q

What is the key criticism of tradable pollution permits?

A

Initial allocation of permits may go to the most politically connected firms.

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16
Q

What is the result of assigning accountability for a firm’s waste?

A

Will alleviate external damages and secondary markets for waste products will evolve (e.g., cows eating spent beer grains)

17
Q

What are 3 examples of government subsidies to encourage more investments in green technology?

A
  • Tax credits
  • Grant money for green R&D
  • Government-Industry partnerships
18
Q

What is asymmetric information?

A

When one side has information it doesn’t share with the other side.

19
Q

What is an example of asymmetric information that affects demand? What are the results?

A
  • Buying used cars
  • Consumers pay too much
  • Too much is consumed (in terms of efficiency)
20
Q

What is an example of asymmetric information that affects supply? What are the results?

A
  • Health risks in factory not made clear to workers
  • Workers under compensated relative to what is socially efficient
  • Too much labor is supplied (in terms of efficiency)
21
Q

What is private regulation?

A

Regulation that forms when customers perceive that the government quality regulations are insufficient

22
Q

When is private regulation profitable for firms?

A

When market values additional regulation over cost of providing it

23
Q

What are 3 key elements of public regulation? (KNOW DIFFERENCES FOR EXAM!)

A
  • Don’t always consider costs of regulation
  • Funded through taxes paid by all individuals
  • Tend to respond only to media scares
24
Q

What are 3 key elements of private regulation? (KNOW DIFFERENCES FOR EXAM!)

A
  • Profitability depends on the efficiency of their regulations
  • People that benefit from regulation pay for it
  • Based on need for regulation within the industry
25
Q

How much regulation is efficient?

A
  • Not 100% safety

- MB = MC

G202 Final (1 decks)

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