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Duopoly Competition with Corporate Social Responsibility

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  • Chan Wang
  • Pu‐yan Nie
  • Yan Meng

Abstract

This paper highlights the effect of firms’ position on firms’ strategies with corporate social responsibility (CSR) practices under three different cases: Cournot competition; Stackelberg competition with the CSR firm taking the leader position and turnover, with the profit maximising (PM) firm playing as the leader. Some interesting conclusions are achieved. First, the CSR firm always produces more than the PM firm. Second, the outputs of both firms (the consumer surplus) under the PM firm's leading position are larger than those under Cournot. Third, the profits of both firms (producer surplus) under the PM firm playing the leading position are less than those under Cournot. Surprisingly, when the PM firm first moves, the PM firm's profits are the lowest while the CSR firm's outputs are the highest in all three cases. Finally, the relationship of social welfare under the three cases is ambiguous.

Suggested Citation

  • Chan Wang & Pu‐yan Nie & Yan Meng, 2018. "Duopoly Competition with Corporate Social Responsibility," Australian Economic Papers, Wiley Blackwell, vol. 57(3), pages 327-345, September.
    • Handle: RePEc:bla:ausecp:v:57:y:2018:i:3:p:327-345
    DOI: 10.1111/1467-8454.12119
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    Cited by:

    1. Sumi Cho & Sang‐Ho Lee & Xoan T. Hoang, 2019. "Corporate social responsibility and strategic trade policy: An endogenous timing game and its policy implications," Australian Economic Papers, Wiley Blackwell, vol. 58(4), pages 480-497, December.
    2. Junlong Chen & Chaoqun Sun & Jiali Liu & Yan Huo, 2021. "The optimal level of corporate social responsibility based on the duopoly model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 177-184, January.
    3. Chan Wang & Pu‐yan Nie, 2020. "Retail competition using free shopping shuttle bus strategies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(6), pages 1010-1019, September.
    4. Zhang, Qidi & Wang, Leonard F.S., 2022. "Corporate social responsibility, entry and optimal privatization in an international mixed market," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 14-24.
    5. Arturo Garcia & Mariel Leal & Sang‐Ho Lee, 2020. "Cooperation with a multiproduct corporation in a strategic managerial delegation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(1), pages 3-9, January.
    6. Yang, Dong-xiao & Chen, Zi-yue & Yang, Yong-cong & Nie, Pu-yan, 2019. "Green financial policies and capital flows," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 522(C), pages 135-146.
    7. Hsu, Bo-Xiang & Chen, Yi-Min, 2023. "The relationship between corporate social responsibility, external orientation, and environmental performance," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    8. Wen, Jun & Diao, Yu & Wang, Leonard F. S. & Sun, Ji, 2022. "Privatization, entry and corporate social responsibility with consumer cognition," MPRA Paper 115169, University Library of Munich, Germany.
    9. Wang, Kun Tracy & Wu, Yue & Ho, Kin-Yip, 2021. "Internal control reporting and cost of bond financing: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 1323-1346.
    10. Ding Chen & Leonard F. S. Wang & Ji Sun, 2023. "Does CSR influence privatization wave?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1088-1097, March.
    11. Bin Ying & Leonard F. S. Wang & Qidi Zhang, 2023. "Upstream collusion and corporate social responsibility in downstream competition," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1020-1028, March.
    12. Junlong Chen & Chaoqun Sun & Jiali Liu, 2022. "Corporate social responsibility, consumer sensitivity, and overcapacity," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 544-554, March.
    13. Michael Kopel, 2021. "CSR leadership, spillovers, and first-mover advantage," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 489-505, December.
    14. Xu, Lili & Lee, Sang-Ho, 2021. "Strategic Corporate Social Responsibility by a Multinational Firm and International Privatization Policies," MPRA Paper 105651, University Library of Munich, Germany.

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