Corporate social responsibility and endogenous competition structure in an industry composed of firms with generalized biased managers

Abstract

AbstractThis paper revisits the endogenous choice between strategies (price and quantity) in a duopoly of firms inclined towards corporate social responsibility (CSR) with generalized biased managers. We primarily focus on the situation where managers evaluate the market size based on the weighted sum of their types. We show that when the weight on each manager's type is fixed, the area on the degrees of importance of CSR, such that Cournot competition can be observed in equilibrium, becomes larger as the degree of homogeneity between the goods produced by CSR firms increases.