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Environmental corporate social responsibility under price competition and the second‐mover advantage: An endogenous timing approach

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  • Chul‐Hi Park
  • Sang‐Ho Lee

Abstract

We consider an environmental corporate social responsibility (ECSR) under price competition in a product differentiated duopoly and formulate an extensive endogenous timing game where firms choose ECSR and subsequently choose prices. We show that a successive sequential‐move appears in the equilibrium wherein an ECSR leader adopts a lower degree of ECSR and thereupon chooses a price leader. Therefore, the firm with a low degree of ECSR becomes a price leader while the firm with a high degree of ECSR becomes a price follower but earns higher profits, that is, a second‐mover advantage with ECSR‐induced higher costs appears.

Suggested Citation

  • Chul‐Hi Park & Sang‐Ho Lee, 2023. "Environmental corporate social responsibility under price competition and the second‐mover advantage: An endogenous timing approach," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(4), pages 817-829, December.
    • Handle: RePEc:bla:ijethy:v:19:y:2023:i:4:p:817-829
    DOI: 10.1111/ijet.12376
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    References listed on IDEAS

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