Social Responsibility in a Bilateral Monopoly with Downstream Convex Technology

Luciano Fanti and Domenico Buccella

Journal of Industry, Competition and Trade, 2020, vol. 20, issue 4, No 7, 776 pages

Abstract: Abstract This paper shows that, in a bilateral monopoly with consumer-friendly social concerns, only the downstream firm is always incentivized to adopt corporate social responsibility (CSR) if it has decreasing returns to the input, leading to a Pareto-superior outcome in equilibrium. This occurrence differs from a standard linear bilateral monopoly in which, if the upstream (downstream) firm commits itself to CSR before the downstream (upstream) does, then both firms improve profits, while they do not deviate from pure profit-maximization if CSR levels are simultaneously chosen. Straightforward policy and empirical implications are offered, and this paper argues that the presence of CSR-type firms crucially depends on technology.

Keywords: Bilateral monopoly; Corporate social responsibility (search for similar items in EconPapers)
JEL-codes: D21 L12 L22 M14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10842-020-00343-3 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:jincot:v:20:y:2020:i:4:d:10.1007_s10842-020-00343-3

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/10842/PS2

DOI: 10.1007/s10842-020-00343-3

Access Statistics for this article

Journal of Industry, Competition and Trade is currently edited by Karl Aiginger, Marcel Canoy and Michael Peneder

More articles in Journal of Industry, Competition and Trade from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().