Optimal Strategies of Product Price, Quality, and Corporate Environmental Responsibility

Wei Peng, Baogui Xin and Yekyung Kwon
Additional contact information
Wei Peng: Nonlinear Science Center, College of Economics and Management, Shandong University of Science and Technology, Qingdao 266590, China
Baogui Xin: Nonlinear Science Center, College of Economics and Management, Shandong University of Science and Technology, Qingdao 266590, China
Yekyung Kwon: Division of Global Business Administration, Dongseo University, Busan 47011, Korea

IJERPH, 2019, vol. 16, issue 23, 1-24

Abstract: With the awakening of environmental consciousness, more and more firms desire to go “green” by shifting their focus of corporate social responsibility (CSR) from charitable contributions to environmental actions called corporate environmental responsibility (CER). We develop a monopoly differential game to depict optimal corporate strategies of product price, quality, and CER. Using the Hamilton–Jacobi–Bellman (HJB) equation, we analyze optimal feedback equilibrium strategies for pricing and investing in both quality and CER with/without government subsidies. Numerical simulations show that government subsidy can improve CER and profit.

Keywords: corporate social responsibility (CSR); corporate environmental responsibility (CER); government subsidy; social welfare; feedback equilibrium (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/1660-4601/16/23/4704/pdf (application/pdf)
https://www.mdpi.com/1660-4601/16/23/4704/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jijerp:v:16:y:2019:i:23:p:4704-:d:291028

Access Statistics for this article

IJERPH is currently edited by Ms. Jenna Liu

More articles in IJERPH from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().