Corporate social responsibility in a unionised duopoly

  • Luciano Fanti Department of Economics and Management, University of Pisa
  • Domenico Buccella Department of Economics, Kozminski University

Abstract

It is commonly believed that the choice of adopting Corporate Social Responsibility (CSR) behaviours is beyond the scope of profit enhancement. In a unionised oligopoly with centralised wage setting and decreasing returns to scale technology, the present paper shows that the owners’ choice of the CSR engagement level is dictated by the firms’ purely selfish profit-seeking objective. In fact, profits under CSR are higher than under the standard profit-maximising rule. Moreover, the union, consumers and the social welfare on the whole with CSR are higher than without CSR: the firms’ owners social concern leads to a Pareto-superior outcome.
Keywords Cournot Duopoly, labour union, corporate social responsibility
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How to Cite
Fanti, L., & Buccella, D. (2019). Corporate social responsibility in a unionised duopoly. Estudios de Economía, 46(2), 227-244. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/55274/58218
Section
Articles
Published
2019-11-26