In a green goods market a combination of individual and corporate social responsibility
may lead to the internalization of externalities. This economics experiment implements a
market for green credence goods in the presence of externalities on other buyers and
explores whether a combination of individual and corporate social responsibility may lead
to the internalization of externalities. Under information asymmetry, we observe
widespread false claims and an apparently pro-environmental market, when in reality green
goods are sparingly sold. When a credible label is possible or when the information
asymmetry is removed, the provision of actual green goods increases, but is roughly 20% to
25% of the market share. While this share is non-negligible, the niche market that ensues
does not ensure that less environmentally damaging consumption options will be
widespread, nor that social welfare will be maximized once the information asymmetry is
removed.info:eu-repo/semantics/publishedVersio