Effects of corporate social responsibility on food safety

You-Hua Chen, Pu-yan Nie and Yong-Cong Yang
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You-Hua Chen: College of Economics & Management and Guangdong Center for Rural Economic Studies, South China Agricultural University, Guangzhou, China
Yong-Cong Yang: Guangdong University of Foreign Studies, Guangzhou, China

Agricultural Economics, 2017, vol. 63, issue 12, 539-547

Abstract: This paper develops the theory of corporate social responsibility (CSR) in the food industry. The effects of CSR on the food industry are captured. First, we argue that CSR reduces the profits of a CSR firm under monopoly. Second, under complete information, regulation does not improve social welfare. We find that both active price regulation and active quality regulation reduce a monopolist's profits, consumer surplus and social welfare. Finally, under incomplete information, the monopolist exaggerates quality as much as possible. With quality regulation, CSR reduces exaggerated quality in the food industry.

Keywords: food quality; game theory; quality regulation; social welfare (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:63:y:2017:i:12:id:177-2016-agricecon

DOI: 10.17221/177/2016-AGRICECON

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