Boycotts, Compliance, Surrogates, And The Free Rider Dilemma

Jennifer Jacquet over on her blog Guilty Planet has thrown-down a challenge to those of us still scrambling for the perfect New Year's resolution,

It's that time of year where we welcome changes and commitment to ideals. New gym memberships. Re-committing to flossing every day. Giving up seafood...

My New Year's resolution was to finally write this blogpost compile a list of people that will boycott seafood (all farmed and wild caught marine and freshwater animals) for 2010...

Jennifer goes on to summarize her key reasons why boycotting seafood is the right choice,

EATING SEAFOOD IS NOT THAT HEALTHY.

EATING SEAFOOD HAS NEGATIVE ECOLOGICAL CONSEQUENCES.

TO EAT SEAFOOD IS TO EAT SOME OF THE PLANET'S LAST REMAINING WILDLIFE.

As you might expect, a lively discussion is transpiring in Jennifer's comment section since she first posted this. While I do indeed have opinions on Jennifer's three-point rationale for a total boycott of aquatic species, I'll leave that for the moment. Instead, I'm more interested in asking whether a voluntary boycott could possibly achieve a meaningful impact on the global seafood catastrophe.

Andrew at Southern Fried Science doesn't think so.

If your goal is to fix commercial fisheries, he reasons, there are several possible avenues of attack,

We can manage fisheries through laws and regulations that make it too expensive to fish, but that not only drives people out of jobs, but drive the fishery to a country where those regulations don’t exist. We can change the demand, so that it becomes more profitable to sell sustainable seafood then unsustainable seafood. We can educate people about their seafood choices and help them make better informed decisions. But for any of those solutions, we have to instill in the general public a value for fish that is more than just the cost of consumption. The one solution that does not do that is to leave the table.

Which is exactly what this boycott does.

Andrew argues that a boycott of seafood only works with 100% compliance. "Anything short", Andrew states, "is a total failure."

Or is it?

Now I'm not saying that I agree with Jennifer's boycott approach as a practical solution to the collapse of global fisheries. It strikes me as too much like Just Say No. And for conservation to work, we absolutely must think of solutions that can actually gain traction with consumers and policy-makers. In both developed and developing economies.

But at the same time, is Andrew correct is suggesting that for a boycott to be successful, nothing short of 100% compliance is acceptable? I started to wonder if there is any historical precedent we might examine that can serve as an exemplar.

Turns out that a pretty good lesson can be gleaned from the American boycott of French products launched in early 2003. In an angry response to France's opposition to the US war in Iraq, some Americans--particularly FOX News commentator Bill O'Reilly--called for a boycott of French products (remember Freedom Fries?). Such a boycott can be described as a surrogate boycott, in which the French products serve as a stand-in for the French government.

While the net effect on US-French trade appeared negligible, an analysis published last year by researchers at the Graduate Schools of Business at Stanford and the University of North Carolina indicated that we might not want to dismiss voluntary boycotts too quickly. For one market segment, French wines, the boycott indeed registered concern,

At the peak of the boycott, our conservative estimate is that French wine sales would have been 27% higher if there had been no boycott. We also find that the boycott lasted for six months, and French wine sales would have been 13% higher over these six months if there had been no boycott.

Previous studies that examined boycott impacts to French wine sales indicated little to no meaningful impact. The Stanford-North Carolina researchers conclude that an overly rosy picture of French wine sales was the result of sampling bias of previous investigators who examined only changes in stock prices in response to boycotts. But stock prices are influenced by many factors and may not be a reliable indicator in this case. The Stanford-North Carolina team drew instead on scanner data from supermarkets and large merchandisers—hard measures of weekly consumer purchasing behavior.

Is a 27% dip in profits enough to topple global seafood conglomerates? Probably not. But I wouldn't say it's a non-trivial impact from a voluntary boycott. I'm not well-versed enough in seafood costs to extrapolate what a 27% hit would mean to the seafood industry (as if it were an individual entity), but I could probably safely say we are talking about tens of millions of US dollars.

Getting back to Andrew's comment that "nothing short of 100% compliance is successful" seems to depend upon what you mean by "successful." If success is defined by both idealistic and participatory compliance in a voluntary boycott, then it seems success will be elusive indeed.

To put it another way, think about a public resource such as public transit. Fares paid by riders of public transit offset upkeep and maintenance of the service. But we've probably all experienced individuals who have used public transportation without paying the fare. These so-called "free-riders" shoulder less than a fair share of the costs of the service. If too many free-riders do this, the system will not have enough money to operate. Free-riders are classic economic theory foils to arguments in favor of boycott effectiveness.

In the case of a voluntary boycott of seafood, a free-rider logic suggests consumers are unlikely to voluntarily participate: individual consumers are glad for others to alter their purchase choices in support of some cause, but realize their own participation is unlikely to make any difference and would require some sacrifice.

I'm only guessing that Andrew is in part referring to the "free-rider problem" when he describes supply-limited fisheries,

Even if we were to reduce 90% of the demand for certain fish, the remaining demand would still be great enough to consume 100% of the supply. If 100 people all love grouper, but only 10 grouper are being produced at any given time, then even if you convinced 90 people to never eat grouper, the other ten would still eat the 10 grouper being produced, and nothing would change.

Despite the potential impact the free-rider effect can have, the Stanford and University of North Carolina researchers suggest a psychological explanation for why the free-rider problem may not stifle boycott participation: Individual consumers may have an exaggerated sense of their own effectiveness, or individuals may have a false sense of consensus. I suppose this can cut both ways. On the one hand it can spur-on compliance to a worthy cause. On the other, it would truly suck to be the sole individual, so deluded by a false sense of their own self-importance, who is left standing out in the cold on a futile cause.

A final thought on where my French wine-seafood boycott analogy unravels (though some of you will no doubt suggest it was in the first few paragraphs of this overly long post) has to do with alternatives. In the case of the French wine boycott of 2003, consumers who voluntarily complied with the boycott had reasonably close substitutes for French wines. There were wonderful California, South American, and Australian alternatives to much-loved Bordeaux.

In Jennifer's call for a wholesale boycott of all things aquatic, I'm not seeing a viable alternative for the dinner plate. She does offer that suitable vegetarian seafood simulacra exists, but try selling that in a serious way to the foodie capitals here in the states. And I'm not sure whether a suggestion to encourage seafood lovers to go on a beef, pork, chicken bender is better conservation sense from a carbon output perspective.

While I think a boycott could have it's place and time, a blanket call for a seafood boycott punishes those fisheries, restaurants, and consumers who are making efforts towards sustainability and reform and lumps them together with the rank and file.

_{Citation: Consumer Boycotts: The Impact of the Iraq War on French Wine Sales in the U.S., Larry Chavis and Phillip Leslie, Stanford Graduate School of Business working paper, 2008}