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Baron Diermeier (2006) - Strategic Activism And Nonmarket Strategy (view source)
Revision as of 18:16, 28 February 2011
, 18:16, 28 February 2011→A Specific Functional Form
Which has the following comparative statics:
*The demand <math>x_D^*\,</math> are strictly increasing in <math>\gamma ,p, x_0\,</math> (the greater the marginal benefit <math>\gamma\,</math>, the more responsive a target <math>\p,\,</math>, and the better current practices <math>\x_0\,</math>, the higher is demand)
*The demand <math>x_D\,</math> are strictly decreasing in <math>\alpha, \beta, \eta\,</math> (the higher costs of a campaign lead to lower demands)
*Reward is increasing in <math>\gamma\,</math> and decreasing in <math>\alpha, \eta\,</math>
This suggests that more responsive firms will be threatened with harm over rewards, and that harm will be preferred when rewards are costly. If the internet reduces <math>\beta\,</math>, then we would expect to see campaigns with higher demands that emphasize more harm after its adoption.
===Why Are Campaigns Negative?===
