CSR effectivity evaluation with usage of game theory

Abstract

The article is devoted to the implementation of the game theory for the CSR effectivity evaluation. We proved the fact that zero-sum game cannot be applied to the CSR. Based on the rational nature of players, each of them will choose a dominant strategy, which involves increasing profits and simultaneous social and environmental impact. For a case of socially responsible activity, as a game with a non-zero sum in the long run (repetitive game), the dominant strategy is the Nash’s equilibrium and the use of socially responsible practices in business; creating an unstable balance that involves taking into account the actions of other players, and in the short term (nonrepetitive game) the strategy of maximizing the results is dominant, which involves the use of socially responsible practices; a stable balance is created that does not change regardless of the actions of other players. The selfish thinking of each player in the long-term (strategic) perspective in the Nash’s equilibrium, leads to a general loss. The result is optimal when each player behaves in the best way not only for himself but for other players as well. The player’s decision, which contradicts the Nash’s balance, leads to his defeat. Moreover, the Nash’s equilibrium requires each player to trust another one as CSR is a non-cooperative game, so players can not form coalitions and act together.