F(C) would be the value of all outstanding shares of a firm whose equity was held by charities. If some of small portion was available to the public, this could be calculated by looking to recent stock prices and multiplying it by the total number of outstanding shares. One way of looking at this is the current cash value of the future stream of income. What I am describing here is market capitalization.
P is the monetary value of the benefits of being a Guiding Producer rather than a traditional firm. As this paper describes, consumers would prefer popular charities benefit from their purchases rather than traditional investors. This can transfer to increased market share, which translates to increased market cap. The paper describes various other manners in which Guiding Producers may be preferentially treated by other economic actors. BOAS shows examples of this with better commissions from brands selling on its site, consultants that work for free rather than charge a couple hundred dollars an hour, etc. So P is the delta in market cap between a firm with nearly total equity held by charity (and advertising this fact) and the same firm with just normal private equity.
Essentially, equity being held almost wholly by a popular charity(s) confers an advantage without a corresponding disadvantage. The Consumer Power Initiative is working to maximize the effect of this advantage by augmenting public awareness and discovering the most advantageous contexts for these companies.
Is this helpful in clarifying for you?
EDIT: I edited the main post to clarify that F(C) and F(K) refer to market capitalization.
This needs some clarification. What are the units here? this is “value added”?
By what measure? If F(C) is “a firm…” what is being expressed here? The firm’s value generated per year in some monetary unit?
Hi David,
F(C) would be the value of all outstanding shares of a firm whose equity was held by charities. If some of small portion was available to the public, this could be calculated by looking to recent stock prices and multiplying it by the total number of outstanding shares. One way of looking at this is the current cash value of the future stream of income. What I am describing here is market capitalization.
P is the monetary value of the benefits of being a Guiding Producer rather than a traditional firm. As this paper describes, consumers would prefer popular charities benefit from their purchases rather than traditional investors. This can transfer to increased market share, which translates to increased market cap. The paper describes various other manners in which Guiding Producers may be preferentially treated by other economic actors. BOAS shows examples of this with better commissions from brands selling on its site, consultants that work for free rather than charge a couple hundred dollars an hour, etc. So P is the delta in market cap between a firm with nearly total equity held by charity (and advertising this fact) and the same firm with just normal private equity.
Essentially, equity being held almost wholly by a popular charity(s) confers an advantage without a corresponding disadvantage. The Consumer Power Initiative is working to maximize the effect of this advantage by augmenting public awareness and discovering the most advantageous contexts for these companies.
Is this helpful in clarifying for you?
EDIT: I edited the main post to clarify that F(C) and F(K) refer to market capitalization.