Why Firms Should Care for All Consumers

Lisa Planer-Friedrich and Marco Sahm

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We compare the strategic potential of Corporate Social Responsibility (CSR) and Customer Orientation (CO) as commitments to larger quantities in Cournot competition, modeled as a multi-stage game. First, in addition to profits, firms can choose to care for the surplus of either all consumers (CSR) or their own customers only (CO). Second, they decide upon the weight of this additional objective. We find that firms prefer to care for all consumers, choosing positive levels of CSR.

JEL-codes: D43 L13 L21 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-bec, nep-com, nep-cta, nep-mic and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168257

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