Non‐cooperative and cooperative environmental corporate social responsibility with emission taxes

Abstract

This study examines emission taxes and environmental corporate social responsibility (ECSR) under cooperative and non‐cooperative regimes, respectively, and compares Cournot and Bertrand competitions. We show that (i) there exists substitutability between emission taxes and ECSR, while the cooperative case always yields lower emission taxes and higher ECSR; (ii) environmental damage and social welfare are independent of types of ECSR under Cournot, but both are higher in the cooperative ECSR under Bertrand; and (iii) the cooperative ECSR cannot achieve socially desirable outcomes, whereas the non‐cooperative ECSR is beneficial to society under low marginal damage.