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| Lisa Planer-Friedrich and Marco Sahm |
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| ''Why Firms Should Care for All Consumers'' |
| ( 2018, Vol. 38 No.3 ) |
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| We compare the strategic potential of Corporate Social Responsibility (CSR) and Customer Orientation (CO) as commitments to larger quantities in Cournot competition, modeled as a multi-stage game. First, in addition to profits, firms can choose to care for the surplus of either all consumers (CSR) or their own customers only (CO). Second, they decide upon the weight of this additional objective. We find that firms prefer to care for all consumers, choosing positive levels of CSR. This result provides an explanation for the recent shift in corporate culture from CO to CSR. |
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| Keywords: Corporate Social Responsibility, Customer Orientation, Cournot Duopoly, Commitment |
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
L2 - Firm Objectives, Organization, and Behavior: General |
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| Manuscript Received : Feb 21 2018 | | Manuscript Accepted : Sep 07 2018 |
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