Corporate Social Responsibility and Profit Maximizing Behaviour

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Becchetti, Leonardo ; Giallonardo, Luisa ; Tessitore, Maria Elisabetta (2005)
  • Subject: corporate social responsibility; profit maximizing monopolist
    • jel: jel:A13

We examine the behavior of a profit maximizing monopolist in a horizontal differentiation model in which consumers differ in their degree of social responsibility (SR) and consumers SR is dynamically influenced by habit persistence. The model outlines parametric conditions under which (consumer driven) corporate social responsibility is an optimal choice compatible with profit maximizing behavior.
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