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Hybrid evolutionary oligopolies and the dynamics of corporate social responsibility
Journal of Economic Interaction and Coordination ( IF 1.237 ) Pub Date : 2020-10-13 , DOI: 10.1007/s11403-020-00303-4
Tomáš Tichý , Davide Radi , Fabio Lamantia

The diffusion of corporate social responsibility is investigated by employing a hybrid evolutionary game where a firm chooses between being either socially responsible, which implies devoting a fraction of its profit to social projects, or non-socially responsible. Consumers prize socially responsible companies by paying a higher reservation price for their products. The hybrid evolutionary framework is characterized by a quantity dynamics that describes the oligopolistic competition given firms’ belief about the composition of the industry. At regular intervals of time, this belief is endogenously updated by a retrospective comparison on the profits obtained and on the basis of an evolutionary mechanism. Assuming that firms are Nash players, that is at each instant of time they produce the Nash equilibrium-in-belief quantity, the investigation of the model reveals that an industry homogeneously populated by socially responsible firms is a stable equilibrium when the fraction of profits earmarked for socially responsible activities is sufficiently limited. However, the extra marginal profits of a socially responsible firm are reduced when the number of competitors increases, impeding the diffusion of socially responsible companies. In particular, the trade-off between a higher net margin on sales obtained by socially responsible firms and a lower level of production that reduces the profit gap between a socially responsible firm and the rest of the market shows that an increased size of the industry favors mixed oligopolies. Moreover, imposing the hypothesis of neutrality of CSR activities, the model reveals that being socially responsible is an evolutionarily stable strategy for firms and is convenient for customers. Relaxing the hypothesis of Nash players by introducing boundedly rational firms that decide their level of production according to a partial adjustment toward the best reply, the robustness of these results is confirmed.



中文翻译:

混合进化寡头与企业社会责任的动态

企业社会责任的传播通过采用一种混合进化博弈来对企业进行调查,在这种博弈中,企业在承担社会责任(这意味着将其利润的一部分用于社会项目)或非社会责任之间进行选择。消费者通过为其产品支付更高的保留价来奖励对社会负责的公司。混合进化框架的特征在于数量动态,它描述了给定企业对行业构成的信念的寡头竞争。在固定的时间间隔内,通过对获得的利润并基于进化机制进行回顾性比较,对这一信念进行内生性更新。假设公司是Nash参与者,也就是说,它们在每个时刻都会产生Nash信念平衡量,对模型的研究表明,当专门用于社会责任活动的利润比例受到足够限制时,由社会责任公司组成的行业是一个稳定的均衡。但是,随着竞争者数量的增加,社会责任公司的额外边际利润会减少,从而阻碍了社会责任公司的扩散。特别是,对社会责任公司所获得的销售净利润较高与生产水平较低之间的权衡取舍,这减少了社会责任公司与其他市场之间的利润差距,这表明该行业的规模扩大有利于混合寡头。此外,强加了企业社会责任活动中立的假设,该模型表明,对公司负责的社会责任是企业发展的稳定策略,对客户而言很方便。通过引入有限理性的公司来放宽Nash参与者的假设,这些公司根据对最佳答复的部分调整来决定其生产水平,从而证实了这些结果的稳健性。

更新日期:2020-10-13
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