Warsaw Economic Seminars
WES
Hour: 17.10
Date: December, 10th (Thursday) 2015
Place: Room: 8A, SGH
Profit raising entry effects versus barrier
to entry effects in network industries
with Corporate social responsibility
Domenico Buccella
Kozminski University
Abstract:
This paper investigates entry decisions in network industries where firms follow Corporate Social
Responsibility (CSR) behaviours. The findings show very rich entry effects due to the interaction
between the network and CSR features. In particular, it is shown that both features work, reinforcing each other, for impeding entry unless the network effects are very intense. In the latter case,
following CSR rules not only may favour entry, but for medium-high levels of CSR engagement even
an incumbent’s profits raising entry effect occurs. The latter result is at odds with the conventional
wisdom and shows another channel the preceding literature has so far not explored for the possibility
of a profit raising entry.
Keywords:
CSR, Duopoly, Profitability, Entry.
Joint work with: Luciano Fanti (University of Pisa).
Warsaw Economic Seminars
organized by
Warsaw School of Economics & Faculty of Economics, University of Warsaw
www: https://sites.google.com/site/warsaweconseminars/
e-mail: [email protected].