Corporate social responsibility and capacity sharing in a duopoly model

ABSTRACT

This paper constructs a duopoly model that considers corporate social responsibility (CSR) and capacity sharing, analyzes the equilibrium results and examines the effects of CSR and capacity sharing in three scenarios. CSR has impacts on enterprise output, profits, consumer surplus and social welfare, which are affected by capacity constraints and capacity sharing. The precondition for the realization of capacity sharing is that both enterprises can make profits. At this point, either too high or too low of a capacity sharing price will prevent two enterprises from sharing capacity. Capacity constraints do not necessarily reduce social welfare due to the impacts of CSR.

KEYWORDS:

• Corporate social responsibility
• capacity sharing
• duopoly
• capacity constraints

JEL CLASSIFICATION:

• L11
• L13
• L52

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

The research is supported by the Fundamental Research Funds for the Central Universities [Grant number: N2023036]; the Natural Science Foundation of Hebei Province of China [Grant number: G2018501047]; the Social Science Research Foundation in Higher Education of Hebei Province of China in 2019 [Grant number: SD192015]; the Major Projects of the Key Research Base of Philosophy and Social Sciences of Jilin University [Grant number: 2020XXJD13], and MOE Project of Key Research Institute of Humanities and Social Sciences.