Economic Sanctions and Consumer Behavior in Target States: An Agent-Based Model of Boycott Movements

Abstract

AbstractAn economic sanction is a foreign policy tool that is used to change the behavior or policies of a target state that the sanctioning state deems unacceptable. Economic sanctions often create negative sentiments among individuals in target states. Such negative sentiments can lead individuals to boycott the sanctioner’s branded products in retaliation. We built an agent-based model to examine how individuals start boycotting the sanctioner’s branded products in response to economic sanctions and to identify what factors influence the initiation and continuation of a boycott movement in a target state. In the model, we vary four variables: the threat level of the economic sanction, the media’s reports on the efficacy of the boycott movement, the utility of the sanctioner’s products, and purchase periods. Using these variables, we constructed a baseline model with median values for the four variables. We also created eight scenarios, in which each of the four variables was varied. The results provide new insights into consumer behavior in a target state in response to economic sanctions, as previous studies of economic sanctions focused mainly on public opinion in a target state. We find that the threat level of economic sanctions is crucial in triggering a boycott movement among the first boycotters, and media reports are essential to motivate boycotters to continue the movement. Consumers in a target state are likely to boycott a sanctioner’s product if it has high utility and a short purchase period.KeywordsEconomic sanctionsBoycott movementsTarget statesConsumer behaviorAgent-based modeling