Working Paper
Why Firms Should Care for all Consumers
Lisa Planer-Friedrich, Marco Sahm
CESifo, Munich, 2015
CESifo Working Paper No. 5612
CESifo, Munich, 2015
CESifo Working Paper No. 5612
We compare the strategic potential of Corporate Social Responsibility and Customer Orientation as commitments to larger quantities in Cournot competition. In addition to profits, firms can choose to care for the surplus of either all consumers (CSR) or their own customers only (CO), and if so, to what extent. We find that firms prefer to care for all consumers, choosing positive levels of CSR.
CESifo Category
Industrial Organisation
Public Finance
Industrial Organisation
Public Finance
Keywords: Corporate Social Responsibility, Customer Orientation, Cournot duopoly, commitment
JEL Classification: D430, L130, L210