The Role of Socially Concerned Consumers in the Coexistence of Ethical and Standard Firms
AbstractThe purpose of this paper is to investigate how socially concerned consumers' preferences affects firms' decisions to commit to social responsibility. In a market in which firms face the same demand function and products are homogeneous, we find that a large group of socially concerned consumers or a low cost of social responsibility induces an equilibrium outcome in which ethical and standard firms coexists in the same market. Our result is relevant because we do not assume a product differentiation setup and firms do not separate the market through labeling schemes.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 20117.
Date of creation: 18 Jan 2010
Date of revision:
CSR; Price Competition; Duopoly; ESS; Replicator Dynamics;
Find related papers by JEL classification:
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-23 (All new papers)
- NEP-COM-2010-01-23 (Industrial Competition)
- NEP-NET-2010-01-23 (Network Economics)
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