Who benefits from corporate social responsibility? Reciprocity in the presence of social incentives and self-selection

Guglielmo Briscese, Nick Feltovich and Robert L. Slonim

Games and Economic Behavior, 2021, vol. 126, issue C, 288-304

Abstract: Firms can donate a share of profits to charity as a form of corporate social responsibility (CSR). Recent experiments have found that such initiatives can induce higher effort by workers, generating benefits for both sides of the labour market. We design a novel version of the gift-exchange game to account for self-selection, and find that wages remain the most effective incentive to attract and motivate workers, with corporate donations playing a smaller role than previously suggested. We also show that firms substitute donations to charity with lower wage offers, keeping their profits constant but reducing workers' earnings. Initiatives of corporate philanthropy can thus be marginally beneficial for firms, but considerably costly for workers.

Keywords: Gift exchange; Reciprocity; Corporate philanthropy; Self-selection (search for similar items in EconPapers)
JEL-codes: C91 D64 M52 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Who Benefits from Corporate Social Responsibility? Reciprocity in the Presence of Social Incentives and Self-Selection (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:126:y:2021:i:c:p:288-304

DOI: 10.1016/j.geb.2021.01.005

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