Corporate Social Responsibility and Optimal Pigouvian Taxation

Mauricio Villena

MPRA Paper from University Library of Munich, Germany

Abstract: We formally study Pigouvian taxation in a duopoly market in which a CSR firm interacts with a profit maximizing firm. Unlike previous literature, we consider three different scenarios: (i) the CSR firm acts as a consumer-friendly firm, cares for not only its profits but also consumer surplus, as a proxy of its concern for its "stakeholders" or consumers; (ii) the CSR firm main objective is a combination of its own profit and the environment, caring for the environmental damage produced by the market in which it interacts; and (iii) the CSR firm is both consumer and environmental friendly. Finally, we compare the different Pigouvian rules derived with the first best competitive market solution and the monopoly/duopoly second best solutions.

Keywords: Corporate social responsibility; consumer-friendly firm; environment-friendly firm; Mixed Duopoly; Emission Taxation (search for similar items in EconPapers)
JEL-codes: H23 L13 L31 Q5 Q50 (search for similar items in EconPapers)
Date: 2019-12-03
New Economics Papers: this item is included in nep-bec, nep-com and nep-env
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Related works:
Working Paper: Corporate Social Responsibility and Optimal Pigouvian Taxation (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100035

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