Strategic CSR in Asymmetric Cournot Duopoly

Lisa Planer-Friedrich () and Marco Sahm ()
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Lisa Planer-Friedrich: Otto-Friedrich-Universität Bamberg
Marco Sahm: Otto-Friedrich-Universität Bamberg

Journal of Industry, Competition and Trade, 2021, vol. 21, issue 1, No 2, 33-42

Abstract: Abstract We examine the strategic use of corporate social responsibility (CSR) in Cournot competition between two firms that differ in their marginal costs of production. The level of CSR determines the weight a firm puts on consumer surplus in its objective function before it decides upon supply. We show that the more efficient firm chooses a higher CSR level, reinforcing its dominant position. If there are sufficiently large fixed costs of CSR, only the more efficient firm will engage in CSR.

Keywords: Corporate social responsibility; Cournot duopoly; Asymmetric costs; Heterogenous firms (search for similar items in EconPapers)
JEL-codes: D43 L13 L21 L22 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10842-020-00335-3

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