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A Duopoly of Strategic CSR Firms

Author

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  • Kojun Hamada
  • Kojun Hamada

Abstract

This study examines a Cournot duopoly when corporate social responsibility (CSR) firms endogenize the degree of commitment on consumer surplus. We establish the following results. First, when a CSR firm competes with a profitmaximizing firm, the Stackelberg equilibriumwhereby the CSR firm is the leader is realized. Second, when two CSR firms compete, firm profit is lower and social welfare is higher than profit maximization. Furthermore, considering the linear demand and quadratic cost functions, we derive the equilibrium in duopoly and compare firm profit and social welfare under different duopolies.

Suggested Citation

  • Kojun Hamada & Kojun Hamada, 2022. "A Duopoly of Strategic CSR Firms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 178(3), pages 258-279.
    • Handle: RePEc:mhr:jinste:urn:doi:10.1628/jite-2022-0012
    DOI: 10.1628/jite-2022-0012
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    More about this item

    Keywords

    corporate social responsibility; mixed duopoly; constraint profit maximization; welfare comparison; corporatesocialresponsibility; mixedduopoly; constraintprofitmaximization; welfarecomparison;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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