Dynamic game of corporate social responsibility in a supply chain with competition

Abstract

In the background of economic globalization, the rapid development of information technology and the individualization of customer demand make it difficult for a single enterprise to cope with the increasingly complex market competition. The traditional competition mode between enterprises is difficult to continue. Instead, it is the competition between one supply chain and another supply chain that becomes important. To obtain a sustainable competitive advantage, corporate social responsibility has gradually become the focus of supply chain management. In reality, enterprises in supply chains generally have a long-term, dynamic and stable cooperative relationship, and their corporate social responsibilities have complexity characteristics, which would change with time. Therefore, it is more practical to conduct a dynamic research on the social responsibility decision-making in competitive supply chains under the continuous time background. This study contributes a new approach to the literatures on competitive supply chains and corporate social responsibilities in supply chains by extending the static perspective to a dynamic one, so as to analyze the application of corporate social responsibilities in competitive supply chains. By constructing competition models with two two-echelon supply chains, this paper uses differential game theory to study the decision-making related to corporate social responsibility in supply chains in three situations: decentralized decision-making, centralized decision-making and combined decision-making. This paper determine and contrast the optimal price and corporate social responsibility decision-making in each situation, and analyze the impacts of corporate social responsibility, supply chain reputation and supply chain competition on supply chain revenues. Through simulation analysis, this paper find that corporate social responsibility is an effective tool to realize sustainable supply chain. The corporate social responsibility effect of the centralized supply chain is the greatest. Consumer social responsibility preference, corporate social responsibility efficiency and competition intensity are positively correlated with corporate social responsibility effort. Discount rate and CSR cost coefficient are negatively correlated with corporate social responsibility effort. Finally, some managerial implications are put forward based on the research results.