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A note on Stackelberg equilibrium in duopoly: Strategic use of corporate social responsibility

Author

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  • Ajay Sharma

    (Indian Institute of Management Indore)

Abstract

This paper demonstrates that in a duopoly model with firms being concerned about profit as well as corporate social responsibility (CSR), the outcome of game may coincide with the Stackelberg outcome. We argue that owner of the firm may use CSR orientation as a strategy to become Stackelberg leader in the quantity competition game.

Suggested Citation

  • Ajay Sharma, 2018. "A note on Stackelberg equilibrium in duopoly: Strategic use of corporate social responsibility," Economics Bulletin, AccessEcon, vol. 38(4), pages 1720-1726.
    • Handle: RePEc:ebl:ecbull:eb-18-00706
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I4-P159.pdf
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    References listed on IDEAS

    as
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    4. Bian, Junsong & Li, Kevin W. & Guo, Xiaolei, 2016. "A strategic analysis of incorporating CSR into managerial incentive design," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 86(C), pages 83-93.
    5. Basu, Kaushik, 1995. "Stackelberg equilibrium in oligopoly: An explanation based on managerial incentives," Economics Letters, Elsevier, vol. 49(4), pages 459-464, October.
    6. Michael Kopel & Marco Marini, 2014. "Strategic delegation in consumer cooperatives under mixed oligopoly," Journal of Economics, Springer, vol. 113(3), pages 275-296, November.
    7. Pal, Rupayan & Sharma, Ajay, 2013. "Endogenizing governments' objectives in tax competition," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 570-578.
    8. Michael Kopel & Marco Marini, 2014. "Erratum to: Strategic delegation in consumer cooperatives under mixed oligopoly," Journal of Economics, Springer, vol. 113(3), pages 297-297, November.
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    Citations

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    Cited by:

    1. Chokri Aloui & Khaïreddine Jebsi, 2022. "Does corporate social responsibility solve the chicken‐and‐egg problem for a two‐sided platform?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3235-3256, October.
    2. Sharma, Ajay, 2019. "Misleading Advertising in Mixed Markets: Consumer-orientation and welfare outcomes," MPRA Paper 96189, University Library of Munich, Germany.
    3. Lisa Planer-Friedrich & Marco Sahm, 2021. "Strategic CSR in Asymmetric Cournot Duopoly," Journal of Industry, Competition and Trade, Springer, vol. 21(1), pages 33-42, March.
    4. Juan Carlos Bárcena‐Ruiz & Amagoia Sagasta, 2021. "Cross‐ownership and corporate social responsibility," Manchester School, University of Manchester, vol. 89(4), pages 367-384, July.
    5. Lisa Planer-Friedrich & Marco Sahm, 2020. "Strategic corporate social responsibility, imperfect competition, and market concentration," Journal of Economics, Springer, vol. 129(1), pages 79-101, January.

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    More about this item

    Keywords

    Stackelberg outcome; Corporate social responsibility; Cournot game; Duopoly; Non-profit orientation;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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