Browsing by Author "Mota, Filipa"
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- Coordinated Effects of Corporate Social ResponsibilityPublication . Cunha, Mariana; Mota, FilipaThis paper analyzes the coordinated effects of corporate social responsibility (CSR) in a setting where firms take into account in their objective function the consumer’s welfare in addition to their profits, produce differentiated products, and compete in quantities. We consider a symmetric case, where firms have the same level of CSR and an asymmetric case, where firms have different levels of CSR. Our results confirm that assigning a positive weight to consumer surplus makes collusion harder to sustain, as shown in the literature. However, for a sufficiently high level of CSR, collusion sustainability is actually increasing in the degree of product substitutability when firms are CSR-symmetric. When firms are CSR-asymmetric, collusion sustainability is increasing in the degree of product differentiation if products are complements. Furthermore, we show that collusion may be welfare-improving when firms adopt a socially responsible behavior, which provides an interesting background to competition authorities when analysing cartel cases.
- Coordination effects of Corporate Social ResponsibilityPublication . Cunha, Mariana; Mota, Filipa
- Public–private collusionPublication . Mota, Filipa; Correia-da-Silva, João; Pinho, JoanaWe study collusion between a public firm and a private firm facing linear demand and quadratic costs. We characterize the collusive outcome that results from Nash bargaining and compare it to the non-cooperative outcome. If the public firm’s taste for consumer surplus is mild, both firms reduce output (as in a private duopoly). If it is intermediate, while the public firm reduces output, the private firm expands output to such an extent that total output increases. If it is strong, the private firm’s output expansion does not compensate for the public firm’s output contraction, and thus total output decreases. We also characterize collusion sustainability, and assess the impact of relative bargaining power, degree of cost convexity, public firm’s taste for total surplus, and cost asymmetry. We conclude that, by reducing the productive inefficiency that is caused by the public firm being more expansionary, collusion may lead to higher profits and consumer surplus.
- Welfare-improving mixed collusionPublication . Correia-da-Silva, João; Mota, Filipa; Pinho, Joana
- Welfare-improving mixed collusionPublication . Mota, Filipa; Correia-da-Silva, João; Pinho, JoanaWe study collusion between a public firm and a private firm, focusing on the impact of the public firm’s preference for consumer surplus. We characterize the collusive outcome (market shares, profits, consumer surplus and welfare) that results from Nash bargaining between the two firms, compare it with the competitive outcome, and study sustainability of collusion. If the public firm’s preference for consumer surplus is mild, collusive outcomes are qualitatively similar to those of a private duopoly (both firms reduce output) although distorted by the public firm’s bias towards high output. If the public firm’s preference for consumer surplus is strong, the collusive outcome is qualitatively different. While the public firm reduces output, the private firm expands output to such an extent that total output increases (as long as the public firm’s preference for consumer surplus is not excessive). Output is transferred from the public firm to the private firm so that productive efficiency increases, resulting in higher profits and welfare.