Private CSR Activities in Oligopolistic Markets: Is there any room for Regulation?
AbstractThe present paper examines the conditions under which the regulator can complement the provision of Corporate Social Responsibility (CSR) activities by private firms in an oligopolistic market. Our main finding is that if there is no credible information disclosure about SR characteristics of the firms' products to consumers, no firm will have incentives to undertake CSR effort in equilibrium. However, if the necessary information about the CSR aspects of each firm's product, otherwise unobservable, is made available to consumers through certification provided either by a profit-maximizing certifier or by the regulator, then both firms will have incentives to engage in CSR activities. Hence in equilibrium, consumers' surplus, firms profits and total welfare increase comparing to the benchmark case without CSR activities.
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Bibliographic InfoPaper provided by University of Crete, Department of Economics in its series Working Papers with number 0816.
Date of creation: 17 Jun 2008
Date of revision:
Corporate Social Responsibility; Oligopoly; Vertical Differentiation; Certification.;
Find related papers by JEL classification:
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L5 - Industrial Organization - - Regulation and Industrial Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-21 (All new papers)
- NEP-CTA-2008-06-21 (Contract Theory & Applications)
- NEP-MIC-2008-06-21 (Microeconomics)
- NEP-REG-2008-06-21 (Regulation)
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