ABSTRACT

Economic theory predicts that market e ciencies are greatest when rms maximize their selfinterests. Yet the actions of some rms seem contrary to this prediction. In 1982, Johnson & Johnson faced a public relations disaster. One of their products, Tylenol, had been laced with cyanide. Johnson & Johnson immediately took Tylenol o the shelves, designed a tamper-resistant bottle, and worked extensively with law-enforcement agencies to nd and prosecute those responsible. When interviewed, Johnson & Johnson executives, far from taking their bows, simply said, “We believe our rst responsibility is to the doctors, nurses, and patients, to the mothers and fathers, and to all others who use our products and services.”