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A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): the Multistakeholder Model of Corporate Governance

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  • Lorenzo Sacconi

    (University of Trento - Department of Economics and EconomEtica, Inter university centre of research University Milano - Bicocca)

Abstract

This is the first part of a comprehensive essay on the Rawlsian view of corporate social responsibility (in short, CSR). CSR is defined as a multi-stakeholder model of corporate governance and objective function based on the extension of fiduciary duties towards all of the firm’s stakeholders (see section 2). A rationale for this idea is given firstly within the perspective of new institutional economic theory in terms of transaction costs efficiency. From this perspective, abuse of authority in regard to the non-controlling stakeholders emerges as the main unsolved problem, and makes it impossible to sever efficiency from equity within the domain of corporate governance (section 3). Intuitively, a Rawlsian principle of redress emerges as the natural answer to the legitimization problem of ownership and control rights allocations when, in order to provide incentives to one party (the incentive to undertake important specific investments), they give it a disproportionate advantage over other non-controlling stakeholders.
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  • Lorenzo Sacconi, 2010. "A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): the Multistakeholder Model of Corporate Governance," Econometica Working Papers wp22, Econometica.
    • Handle: RePEc:ent:wpaper:wp22
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    Cited by:

    1. Silvia Sacchetti & Carlo Borzaga, 2021. "The foundations of the “public organisation”: governance failure and the problem of external effects," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 731-758, September.
    2. Eleanor Burt & Samuel Mansell, 2019. "Moral Agency in Charities and Business Corporations: Exploring the Constraints of Law and Regulation," Journal of Business Ethics, Springer, vol. 159(1), pages 59-73, September.
    3. Degli Antoni, Giacomo & Sacconi, Lorenzo, 2013. "Social responsibility, activism and boycotting in a firm–stakeholders network of games with players’ conformist preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 216-226.
    4. Matteo Rossi & Jamel Chouaibi & Salim Chouaibi & Wafa Jilani & Yamina Chouaibi, 2021. "Does a Board Characteristic Moderate the Relationship between CSR Practices and Financial Performance? Evidence from European ESG Firms," JRFM, MDPI, vol. 14(8), pages 1-15, August.
    5. Suzanne Young & Vijaya Thyil, 2014. "Corporate Social Responsibility and Corporate Governance: Role of Context in International Settings," Journal of Business Ethics, Springer, vol. 122(1), pages 1-24, June.
    6. Lorenzo Sacconi, 2011. "A Rawlsian View of CSR and the Game Theory of its Implementation (III): Conformism, Equilibrium Refinement and Selection," Palgrave Macmillan Books, in: Lorenzo Sacconi & Giacomo Degli Antoni (ed.), Social Capital, Corporate Social Responsibility, Economic Behaviour and Performance, chapter 2, pages 42-79, Palgrave Macmillan.

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