Strategic Corporate Social Responsibility

Arbeitspapier

We examine the strategic use of Corporate Social Responsibility (CSR) in imperfectly competitive markets. The level of CSR determines the weight a firm puts on consumer surplus in its objective function before it decides upon supply. First, we consider symmetric Cournot competition and show that the endogenous level of CSR is positive for any given number of firms. However, positive CSR levels imply smaller equilibrium profits. Second, we find that an incumbent monopolist can use CSR as an entry deterrent. Both results indicate that CSR may increase market concentration. Third, we consider heterogeneous firms and show that asymmetric costs imply asymmetric CSR levels.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6506

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Monopoly ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Monopoly; Monopolization Strategies ; Oligopoly and Other Imperfect Markets ; Business Objectives of the Firm ; Firm Organization and Market Structure
• Subject: corporate social responsibility ; market concentration ; Cournot competition ; entry deterrence ; strategic delegation ; evolutionary stability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Planer-Friedrich, Lisa ; Sahm, Marco
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/167492
• Last update: 10.03.2025, 11:43 AM CET