The Big Box Retailer Problem

Beal, B. D. 2012. Competitive markets, collective action, and the Big Box Retailer problem. Journal of Philosophical Economics, 6(1): 2-29. [PDF, journal]

Abstract:

I use a stylized scenario—the Big Box Retailer Problem—to demonstrate that the presence of behavioral interdependence in economic markets may result in deficient outcomes that are both stable and supported by ongoing participant behavior. I present a theoretical discussion of social dilemmas and use the Big Box Retailer Problem to illustrate that these characteristics—stability and ongoing support—cannot be reliably employed as indicators of outcome efficiency. Equally important is the conclusion that upfront costs and the ongoing necessity of monitoring and encouraging contributory behavior are not reliable indicators of the relative inefficiency of outcomes associated with collective action. Questions are raised regarding the ethical responsibilities of business educators and the implications of social dilemmas for corporate social responsibility research.

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