Conflict and Corporate Social Responsibility in Duopoly

Abstract Background: Recent scientific research explains corporate social responsibility as an economic activity. This paper interprets a means of power to increase firms’ market share in duopoly. Objectives: analyses the duopoly model which firms decide on optimal investments and production two phases. The basic question is how significance conflict affects investments, shares, quantities, profits, welfare. Methods / Approach: Conflict technology described by contest success functions determining shares. Game theory, optimization, comparative statics are used analysis. Results: conditions equilibrium existence its characteristics described. adversely profit inefficient firm while it favourably Conflict’s impact efficient firm’s depends marginal cost difference. Conclusions: If there no significant difference, more favourable for not invest socially responsible activities agreement, hurts When difference significant, increases profit, positively impacting