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Corporate social responsibility focusing on consumer surplus and endogenous competition structure: A case of managerial delegation

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  • Yasuhiko Nakamura

Abstract

We suppose that firms care about corporate social responsibility (CSR) and revisit the endogenous choice between price and quantity. We consider that each owner can delegate the decision on market competition to their manager. We express the objective of each firm's owner as the weighted sum of their profit and consumer surplus. We find that the two types of symmetric competitions are observed in equilibrium regardless of the degree of importance of CSR within each firm. In contrast, which of their two competitions is chosen based on the risk domination strikingly depends on the degree of importance of CSR.

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  • Yasuhiko Nakamura, 2022. "Corporate social responsibility focusing on consumer surplus and endogenous competition structure: A case of managerial delegation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3000-3018, October.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:7:p:3000-3018
    DOI: 10.1002/mde.3578
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    Cited by:

    1. Yasuhiko Nakamura, 2022. "Corporate social responsibility and endogenous competition structure in an industry composed of firms with biased managers," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(2), pages 301-321, June.
    2. Jumpei Hamamura & Vinay Ramani, 2023. "Social performance versus relative performance evaluation, asymmetric costs, and quantity competition under managerial delegation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1706-1719, April.
    3. Xingtang Wang, 2023. "Who is more aggressive under vertical product differentiation?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 608-618, January.

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