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Social responsibility in a bilateral monopoly with R&D

Author

Listed:
  • Garcia, Arturo
  • Leal, Mariel
  • Lee, Sang-Ho

Abstract

This note examines social responsibility in a linear bilateral monopoly by incorporating a cost-reducing R&D investment and investigates an endogenous timing game. We find that in the presence of R&D, the retailer always adopts social responsibility irrespective of the timing of the game, but the manufacturer adopts only with its leadership in a sequential game where it can take the first-mover advantage. We also show that two sequential choices will be subgame perfect equilibria, but the commitment to the social responsibility by manufacturer is a payoff dominance outcome.

Suggested Citation

  • Garcia, Arturo & Leal, Mariel & Lee, Sang-Ho, 2018. "Social responsibility in a bilateral monopoly with R&D," MPRA Paper 87200, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:87200
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    File URL: https://mpra.ub.uni-muenchen.de/87200/1/MPRA_paper_87200.pdf
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    More about this item

    Keywords

    social responsibility; R&D investment; fixed-timing game; endogenous-timing game;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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