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Profit raising entry effects in network industries with Corporate Social Responsibility

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  • Luciano Fanti
  • Domenico Buccella

Abstract

This note investigates the possibility of profit raising entry in network industries where firms follow Corporate Social Responsibility (CSR) behaviours, showing the interaction between the network and CSR features. In particular, for high levels of the network effect, an incumbent’s profits raising entry effect occurs. The latter result is at odds with the conventional wisdom and shows another channel the preceding literature has so far not explored for the possibility of a profit raising entry.

Suggested Citation

  • Luciano Fanti & Domenico Buccella, 2017. "Profit raising entry effects in network industries with Corporate Social Responsibility," Economics and Business Letters, Oviedo University Press, vol. 6(3), pages 59-68.
    • Handle: RePEc:ove:journl:aid:11393
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/11393
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    References listed on IDEAS

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    Cited by:

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    2. Toshimitsu, Tsuyoshi, 2020. "Does an incumbent monopolist have an incentive to invite new entry through granting a free patent license?," Research in Economics, Elsevier, vol. 74(4), pages 349-353.
    3. Qidi Zhang & Leonard F. S. Wang, 2022. "Taxation, Network Externalities, Consumer Suffering, and Profit-Raising Entry: A Cautionary Note," Journal of Industry, Competition and Trade, Springer, vol. 22(2), pages 225-231, June.
    4. Mukherjee, Arijit, 2019. "Profit raising entry in a vertical structure," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    5. Jine Qian & Qiang Gong & Leonard F.S. Wang, 2021. "Corporate social responsibility, loan commitment, and social welfare in network duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(4), pages 952-960, June.
    6. Robin Naylor & Christian Soegaard, 2022. "Profit‐raising entry under oligopolistic trade with endogenous input prices," The World Economy, Wiley Blackwell, vol. 45(7), pages 2135-2164, July.
    7. Duarte Brito & Margarida Catalão-Lopes, 2023. "Profit raising entry under mixed behavior," Journal of Economics, Springer, vol. 138(1), pages 51-72, January.

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