Corporate social responsibility in a unionised duopoly

Luciano Fanti and Domenico Buccella

Estudios de Economia, 2019, vol. 46, issue 2, 227-244

Abstract: It is commonly believed that the choice of adopting Corporate Social Responsibility (CSR) behaviours is beyond the scope of profit enhancement. In a unionised oligopoly with centralised wage setting and decreasing returns to scale technology, the present paper shows that the owners’ choice of the CSR engagement level is dictated by the firms’ purely selfish profit-seeking objective. In fact, profits under CSR are higher than under the standard profit-maximising rule. Moreover, the union, consumers and the social welfare on the whole with CSR are higher than without CSR: the firms’ owners social concern leads to a Pareto-superior outcome.

Keywords: Cournot Duopoly; labour union; corporate social responsibility (search for similar items in EconPapers)
JEL-codes: J51 L13 M14 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:udc:esteco:v:46:y:2019:i:1:p:227-244

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