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Do LGBTQ-Supportive Corporate Policies Affect Consumer Behavior? Evidence from the Video Game Industry

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Abstract

This paper empirically examines how consumers react when a company marks a product with a gay label. The company under scrutiny is one of the largest video game developers in the world, and the labeled product is a popular video game character. We use a regression discontinuity design to exploit the quasi-experimental setting. The main finding was significant drop in demand for this character and a return to previous levels after approximately 3 months. Possible mechanisms and dynamics were explored by analyzing demand for other characters and by surveying consumers. The results are consistent after performing robustness checks based on grid search, subsampling, and placebo tests.

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Notes

  1. Research examines the economic impact of same-sex marriage in specific states/regions and find positive associations, e.g., Zhu and Smieliauskas (2021).

  2. In a 2012 poll directed at members of the LGBT community, 92% of the respondents stated that they see society as more accepting than ten years before (Pew Research Center, 2013). Attitudes toward LGBTQs vary greatly throughout the world and change gradually (Haerpfer et al., 2020).

  3. In Twitter, for example, the announcement of Soldier:76’s homosexuality generated negative comments and reactions from multiple users and received much attention, e.g., https://twitter.com/CDawgVA/status/1083331913870426112?s=20.

  4. This means that respondents are not likely to be involved in the demand dynamics that our empirical analysis captured back in 2019.

  5. See, for example, https://twitter.com/BrendenLive/status/1082427372291317760?s=20; https://twitter.com/benny___bee/status/1082382247288807425?s=20; or https://twitter.com/NotTarzan666/status/1082427694753763329?s=20

  6. The results of the survey are available from the authors upon request.

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Acknowledgements

Iuliia Naidenova and Petr Parshakov acknowledge the support of the Basic Research Program at the National Research University Higher School of Economics (HSE University).

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Parshakov, P., Naidenova, I., Gomez-Gonzalez, C. et al. Do LGBTQ-Supportive Corporate Policies Affect Consumer Behavior? Evidence from the Video Game Industry. J Bus Ethics 187, 421–432 (2023). https://doi.org/10.1007/s10551-022-05137-7

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