With a little help from my friends

No, this blog is not about musics or whether or not the Beatles, Joe Cocker and some others ever drank tea.
This title is a thanks to @thedevotea for helping me finding a topic with one of his latest posts (http://thedevotea.teatra.de/2014/03/13/hypocrisy/) and also a hint to what my post is really about: boycotts or rather whether according to classical economics (and the different research papers I read),  boycott is efficient or not.

A boycott is when someone or a group of people decide on their free will not to buy, use… anything related to someone, to a company or to a country as a form of protest (be it for political, environmental or social reasons).
Is this linked to tea? In a way. Do you remember the Boston Tea Party, throwing away tea in protest for a tax rise (to be honest, it was also a problem of smugglers wanting to still make money and merchants being afraid of an increase in the monopoly of the East India Company).
You could also protest because of the working conditions in some estates or because you think that such or such country doesn’t or does support something you don’t like or find unethical.

The real question is whether or not this has any efficiency not from a moral point of view or in the real life but for economics.

The first issue is whether people will get along the movement. When someone hears about the boycott, he can decide to follow it and not consume the said good or he can go on and do as before. Why? Apart from the moral/political sensibilities, boycotting a product has a cost because you give up consuming a good with a certain utility for you and substitute it with another good with a lesser utility for you (since it is not as perfect as the one you consumed before) or with none. In both cases, it has a cost.
Furthermore people know that one people more is unlikely to have much effect and make things change. This is the free ride problem: people are likely not to boycott while wishing it succeeds.

A second issue is scattering. A lot of people are needed to start a boycott, to make it last and to win but how can you coordinate people around the world or a country?
Now with the Internet, forums, Twitter, Facebook and such ; it is easier than before but it could still be a problem when trying to bring more people who are not active in the right media channels in the game.

In a way, boycott is an attrition warfare between people minimising their utility and companies/countries… seeing their sales and benefits go down. Who will stand at the end of the day? The side with more “resources”.

What makes a boycott successful?
The first and most important factor is the market structure. Is this a monopolistic market with only one producer of a certain good? If the answer is yes, the boycott will face difficult times. Is it easy for the consumer to replace these goods? If the answer is no, there again the boycott will be in troble
From the producer point of view, there are three questions to answer. The first one is it diversified enough, i.e. does it have access to a lot of markets or only one? The second one (which is linked) is whether or not this boycott is a huge phenomena or just an isolated one. The last question is how much does it cost to change what is targeted by the activists?

Because you are all polite people, you will not have boycotted me for not tea ranting but here it comes.
So how does it work for tea? My analysis is that thanks to a huge number of companies, it is easy to boycott one  specific company and turns to others with “similar” products.
For gardens or estates, it might become a little more difficult as one tea is not another and although you will have the same utility, the taste and personal preferences might lead to a difficult experience if you can’t find a substitute.
And for countries, it is even more difficult as if you go for the boycott, you will not have any access any longer to a whole type of teas. It might not be a problem if you decide not to buy anything from one of the small tea producing countries but what about the big ones?

In the end, against companies, boycott could work but against the biggest tea producing countries in the world, I think that even “with a big help from our friends”, we would lose much more than we might win.
Think about it, there are plenty of customers ready to buy from them and if not, it is the small producers, those with less power to influence what you are against that are most likely to be hit.

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Xavier

My name is Xavier.

I live on the other side of the pond but you had probably found this out thanks to my “strange” English.

I am a tea addict and I studied several (and I do mean several) years ago marketing, hence this blog, which will try to combine both worlds.
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