Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167492
Authors: 
Planer-Friedrich, Lisa
Sahm, Marco
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6506
Abstract: 
We examine the strategic use of Corporate Social Responsibility (CSR) in imperfectly competitive markets. The level of CSR determines the weight a firm puts on consumer surplus in its objective function before it decides upon supply. First, we consider symmetric Cournot competition and show that the endogenous level of CSR is positive for any given number of firms. However, positive CSR levels imply smaller equilibrium profits. Second, we find that an incumbent monopolist can use CSR as an entry deterrent. Both results indicate that CSR may increase market concentration. Third, we consider heterogeneous firms and show that asymmetric costs imply asymmetric CSR levels.
Subjects: 
corporate social responsibility
market concentration
Cournot competition
entry deterrence
strategic delegation
evolutionary stability
JEL: 
D42
D43
L12
L13
L21
L22
Document Type: 
Working Paper

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