CSR in an Asymmetric Duopoly with Environmental Externalities

Quaderni - Working Paper DSE N° 959

19 Pages Posted: 3 Sep 2014

See all articles by Luca Lambertini

Luca Lambertini

University of Bologna - Department of Economics

Arsen Palestini

University of Bologna - Department of Economics

Alessandro Tampieri

University of Florence - Department of Economics and Management; University of Luxembourg

Date Written: August 25, 2014

Abstract

We investigate a linear state dfferential game describing an asymmetric Cournot duopoly with capacity accumulation à la Ramsey and a negative environmental externality (pollution), in which one of the firms has adopted corporate social responsibility (CSR) in its statute, and therefore includes consumer surplus and the environmental effects of production in its objective function. If the market is sufficiently large, the CSR firm sells more, accumulates more capital and earns higher profits than its profit-seeking rival.

Keywords: capital accumulation, asymmetric duopoly, dynamic games

JEL Classification: C73, H23, L13, O31

Suggested Citation

Lambertini, Luca and Palestini, Arsen and Tampieri, Alessandro, CSR in an Asymmetric Duopoly with Environmental Externalities (August 25, 2014). Quaderni - Working Paper DSE N° 959, Available at SSRN: https://ssrn.com/abstract=2489952 or http://dx.doi.org/10.2139/ssrn.2489952

Luca Lambertini (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy
+39 051 2092600 (Phone)
+39 051 2092664 (Fax)

Arsen Palestini

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Alessandro Tampieri

University of Florence - Department of Economics and Management ( email )

Via delle Pandette, 9
Firenze, Florence 50127
Italy

University of Luxembourg ( email )

Avenue de la Faïencerie
162a
Luxembourg City, Luxembourg L-1511
Luxembourg

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