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Endogenous timing with a socially responsible firm

Arturo Garcia, Mariel Leal and Sang-Ho Lee ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study considers a mixed duopoly in which a socially responsible firm competes with a private firm by incorporating environmental externality and clean technology. We analyze the endogenous market structure in which both firms strategically decides quantities sequentially or simultaneously, which also affects abatement activities. We show that depending on the relative concerns on environment and consumers surplus, the socially responsible firm can be less or more aggressive in the production and abatement. Thus, not only the signifiicance of externality but also the instrumental conflict of social concerns are crucial factors in determining the equilibrium of endogenous timing game, in which the socially responsible firm might earn higher profits.

Keywords: endogenous timing; socially responsible firm; mixed duopoly; clean technology; environmental externality (search for similar items in EconPapers)
JEL-codes: L13 L31 Q5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-com, nep-env, nep-gth and nep-ind
Date: 2018-01-18
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