Corporate social responsibility and strategic relationships

Yoshifumi Hino () and Yusuke Zennyo
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Yoshifumi Hino: Kobe University

International Review of Economics, 2017, vol. 64, issue 3, No 2, 244 pages

Abstract: Abstract We analyze a delegation game relevant to the conduct of corporate social responsibility (CSR) in which the firm’s owner offers the manager a contract consisting of firm profit and social welfare. We derive three results that distinctly differ from existing findings. First, CSR decisions are strategic complements for firms. Second, with simultaneous CSR decisions, the equilibrium price is equal to marginal cost, despite the fact that firms compete in a Cournot duopoly. Finally, with sequential CSR decisions, unlike the follower firm, the leader firm never exhibits CSR. However, the follower firm can enjoy a profit equal to that derived by the leader in a Cournot–Stackelberg game.

Keywords: Corporate social responsibility; Cournot; Strategic substitute; Strategic complement (search for similar items in EconPapers)
JEL-codes: L13 L21 M14 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (18)

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Working Paper: Corporate Social Responsibility and Strategic Relationships (2015)
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DOI: 10.1007/s12232-016-0267-y

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