Corporate Social Responsibility and Product Differentiation

Authors

  • Modhurima Dey Amin Texas Tech University
  • Syed Badruddoza Texas Tech University
  • Robert Rosenman Washington State University

DOI:

https://doi.org/10.33423/ajm.v21i5.4744

Keywords:

management, corporate social responsibility, product differentiation, hotelling model

Abstract

We explore how the source of motivations for Corporate Social Responsibility (CSR) affects market outcomes. The first source is consumer-led; firms practice CSR because consumers value it. If one firm practices CSR it achieves a competitive advantage. If all firms practice CSR, market shares and price remain similar but profits fall, resulting in a Prisoner’s Dilemma. The other source is firm-led CSR that also generates prices, market shares, and revenue that are the same as when neither firms nor consumers care about CSR case, but firms allocate profit to equilibrate its marginal valuation of CSR and financial reward to owners.

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Published

2021-11-23

How to Cite

Amin, M. D., Badruddoza, S., & Rosenman, R. (2021). Corporate Social Responsibility and Product Differentiation. American Journal of Management, 21(5). https://doi.org/10.33423/ajm.v21i5.4744

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Section

Articles