Why firms should care for consumers: Complementary goods

Kazuhiro Ohnishi

MPRA Paper from University Library of Munich, Germany

Abstract: Corporate social responsibility (CSR) is a business approach that cares about social and environmental issues, and customer orientation (CO) is a business strategy that centres on the needs and wishes of customers in all decision-making. This paper examines two games of Cournot duopoly where two profit-maximizing firms produce complementary goods. The first game is that both firms consider the surplus of all consumers (CSR) as corporate culture, and the second game is that both firms care only for their own customers (CO). This paper presents the respective optimal levels of CSR and CO. Furthermore, the paper shows that all the profits in these optimal levels are equal.

Keywords: Complementary goods; Consumer surplus; Cournot model; Customer surplus (search for similar items in EconPapers)
JEL-codes: C72 D21 (search for similar items in EconPapers)
Date: 2023-05-12
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:117305

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