EconPapers    
Economics at your fingertips  
 

Corporate social responsibility and the choice of price versus quantities

Luciano Fanti and Domenico Buccella ()

Japan and the World Economy, 2018, vol. 48, issue C, 71-78

Abstract: This paper revisits the classic issue of comparison between price and quantity competition in the presence of Corporate Social Responsible (CSR) private firms. The results regarding CSR firms are in sharp contrast to the conventional wisdom regarding profit-seeking firms. In fact, profits can be larger under Cournot (resp. Bertrand) competition also when products are complements (resp. substitutes). Moreover, if the goods are substitutes, then the dominant strategy for each firm may be the choice of the price contract in the subgame perfect Nash equilibrium. Also, the dominant Bertrand strategy equilibrium when the goods are complements may be Pareto-inferior from the firms’ perspective. Finally, the cornerstone belief that Bertrand competition is more efficient than Cournot competition may also be reversed.

Keywords: CSR; Cournot-Bertrand duopoly; Profitability; Social welfare (search for similar items in EconPapers)
JEL-codes: D21 L13 L14 M14 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0922142517300403
Full text for ScienceDirect subscribers only

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:eee:japwor:v:48:y:2018:i:c:p:71-78

Access Statistics for this article

Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao

More articles in Japan and the World Economy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-04-14
Handle: RePEc:eee:japwor:v:48:y:2018:i:c:p:71-78