Can Collusion Promote Sustainable Consumption and Production? Not Beneficially Beyond Duopoly

Treuren, Leonard; Schinkel, Maarten Pieter

doi:10.2139/ssrn.3132323

Cited by 5 publications

(7 citation statements)

References 12 publications

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“…See Treuren and Schinkel (2018) for a more elaborate discussion of partial agreements, including quantities and CSR levels of outsiders and results for n > 10. Allowing for n > 10, as in Treuren and Schinkel (2018), does not affect the results presented in this appendix. 46 The curly brackets in Result D1 indicate that the ordering of v f P and v csr P can vary.…”

Section: Partial Agreements With Fringe Competitionmentioning

confidence: 99%

Corporate Social Responsibility by Joint Agreement

Schinkel,

Treuren

2021

SSRN Journal

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Industry-wide voluntary agreements are touted as a means for corporations to take more corporate social responsibility (CSR). We study what type of joint CSR agreement induces competitors to increase CSR efforts in a model of oligopolistic competition with differentiated products. Consumers have a willingness to pay for more responsibly manufactured products. Firms are driven by profit, and are also possibly intrinsically motivated, to invest in CSR efforts. We find that cooperative agreements directly on the level of CSR reduce CSR efforts compared to competition. Such agreements throttle both for-profit and intrinsic motivation for CSR. CSR efforts only increase if agreements are permitted solely on output. Such production agreements, however, reduce total welfare in the market and raise antitrust concerns. Taking externalities into account may help justify a production agreement under a broader welfare standard, but not agreements on CSR directly. Moreover, simply requiring a higher CSR level by regulation while preserving competition always gives higher within-market welfare.

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Section: Partial Agreements With Fringe Competitionmentioning

confidence: 99%

Corporate Social Responsibility by Joint Agreement

Schinkel,

Treuren

2021

SSRN Journal

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“…CSR levels that solve the general game and Mathematica syntax for all the results in this section are available upon request. See Treuren and Schinkel (2018) for a more elaborate discussion of partial agreements, including quantities and CSR levels of outsiders and results for n > 10. Allowing for n > 10, as in Treuren and Schinkel (2018), does not affect the results presented in this appendix.…”

Section: Partial Agreements With Fringe Competitionmentioning

confidence: 99%

“…See Treuren and Schinkel (2018) for a more elaborate discussion of partial agreements, including quantities and CSR levels of outsiders and results for n > 10. Allowing for n > 10, as in Treuren and Schinkel (2018), does not affect the results presented in this appendix. 41 The curly brackets in Result D1 indicate that the ordering of v f P and v csr P can vary.…”

Section: Partial Agreements With Fringe Competitionmentioning

confidence: 99%

“…41 The curly brackets in Result D1 indicate that the ordering of v f P and v csr P can vary. See Treuren and Schinkel (2018) for a detailed discussion.…”

Section: Partial Agreements With Fringe Competitionmentioning

confidence: 99%

“…46 It is noteworthy that for n > 3 total quantity will always decrease as outsiders actually reduce quantity in Nash-equilibrium compared to the non-cooperative benchmark. See Treuren and Schinkel (2018) for details.…”

Section: Partial Agreements With Fringe Competitionmentioning

confidence: 99%

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Corporate Social Responsibility by Joint Agreement

Schinkel

Treuren

2021

SSRN Journal

Self Cite

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Industry-wide voluntary agreements are touted as a means for corporations to take more corporate social responsibility (CSR). We study what type of joint CSR agreement induces firms to increase CSR efforts in a model of oligopolistic competition with differentiated products. Consumers have a willingness to pay for more responsibly manufactured products. Firms are driven by profit, and possibly by intrinsic motivation, to invest in costly CSR efforts. We find that cooperative agreements directly on the level of CSR reduce CSR efforts compared to competition. Such agreements throttle both for-profit and intrinsic motivations for CSR. CSR efforts only increase if agreements are permitted solely on output. Such production agreements, however, reduce total welfare in the market and raise antitrust concerns. Taking externalities into account may help to justify a production agreement under a total welfare standard, but not agreements on CSR directly. Moreover, simply requiring a higher CSR level by regulation while preserving competition always gives higher within-market welfare.

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Coordinated Effects of Corporate Social Responsibility

Cunha

Mota

2020

J Ind Compet Trade

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Can Collusion Promote Sustainable Consumption and Production? Not Beneficially Beyond Duopoly

Cited by 5 publications

References 12 publications

Corporate Social Responsibility by Joint Agreement

Corporate Social Responsibility by Joint Agreement

Corporate Social Responsibility by Joint Agreement

Coordinated Effects of Corporate Social Responsibility

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