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| Arturo Garcia, Mariel Leal and Sang-Ho Lee |
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| ''Social responsibility in a bilateral monopoly with R&D'' |
| ( 2018, Vol. 38 No.3 ) |
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| This note examines social responsibility in a linear bilateral monopoly by incorporating a cost-reducing R&D investment and investigates an endogenous timing game. We find that in the presence of R&D, the retailer always adopts social responsibility irrespective of the timing of the game, but the manufacturer adopts only with its leadership in a sequential game where it can take the first-mover advantage. We also show that two sequential choices will be subgame perfect equilibria, but the commitment to the social responsibility by manufacturer is a payoff dominance outcome. |
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| Keywords: social responsibility, R&D investment, fixed-timing game, endogenous-timing game |
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
M2 - Business Economics: General |
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| Manuscript Received : Apr 13 2018 | | Manuscript Accepted : Aug 05 2018 |
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