Corporate Social Responsibility and Firms’ Ability to Collude

Abstract

A growing interest for Corporate Social Responsibility (CSR) is recently characterising the economic literature.1 One strand identifies CSR with the creation of public goods or curtailment of public bads (Bagnoli and Watts, 2003; Kotchen, 2006; Besley and Ghatak, 2010), generally showing that there is a close parallel between CSR so defined and the results obtained by the models of private provision of public goods. Other contributions study the desirability of CSR (Baron, 2001), the role of CSR in selecting motivated agents (Brekke and Nyborg, 2008) or the bearings exerted by either social pressure or the presence of ‘green’ consumers on market competition (Arora and Gangopdhyay, 1995; Garcia-Gallego and Georgantzis, 2009; and Baron, 2009). Finally, Lundgren (2007), Lambertini and Tampieri (2010) and Manasakis et al. (2011) investigate the possibility that the presence of a CSR firm in an oligopoly translates into an indirect regulatory instrument, and Lambertini and Tampieri (2011a) examine the equilibrium mix of CSR and profit-seeking firms in a Cournot industry.