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http://dx.doi.org/10.15266/KEREA.2018.27.1.001

Environmental Corporate Social Responsibility in a Polluting Duopoly and Endogenous Timing Game  

Lee, Sang-Ho (Graduate School of Economics, Chonnam National University)
Park, Chul-Hi (BK21Plus, Graduate School of Economics, Chonnam National University)
Publication Information
Environmental and Resource Economics Review / v.27, no.1, 2018 , pp. 1-28 More about this Journal
Abstract
This study investigates the strategic environmental corporate social responsibility (ECSR) of polluting duopoly when two firms have different production costs and compete with prices. We then examine an endogenous timing game in choosing ECSR and its effects on environmental damage and social welfare. The followings are the main findings: First, sequential choice of ECSR is strategic complements and it provides late adopter advantage irrespective of cost difference. Second, sequential choice of ECSR is the equilibrium of endogenous timing game. In particular, an efficient firm-leading ECSR is the payoff dominance equilibrium when cost difference is significant. Finally, environmental damage and social welfare depend on the social cost of pollution. In particular, an efficient firm-leading ECSR is socially desirable when social cost is high. However, an inefficient firm-leading ECSR increases environmental damage irrespective of social cost and it reduces social welfare when cost difference is significant.
Keywords
Environmental corporate social responsibility; Sequential ECSR; Endogenous timing game;
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Times Cited By KSCI : 1  (Citation Analysis)
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