Working Paper: CEPR ID: DP7559
Authors: Roland Bénabou; Jean Tirole
Abstract: Society?s demands for individual and corporate social responsibility as an alternative response to market and distributive failures are becoming increasingly prominent. We first draw on recent developments in the "psychology and economics" of prosocial behavior to shed light on this trend, which reflects a complex interplay of genuine altruism, social or self image concerns, and material incentives. We then link individual concerns to corporate social responsibility, contrasting three possible understandings of the term: the adoption of a more long-term perspective by firms, the delegated exercise of prosocial behavior on behalf of stakeholders, and insider-initiated corporate philanthropy. For both individuals and firms we discuss the benefits, costs and limits of socially responsible behavior as a means to further societal goals.
Keywords: Corporate Social Responsibility; Prosocial Behavior; Shareholder Value; Social Image; Socially Responsible Investment
JEL Codes: D64; D78; H41; L31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CSR activities (M14) | improved long-term financial performance (G32) |
| stakeholder preferences (D72) | corporate behavior (M14) |
| individual motivations (D91) | corporate actions (G34) |
| visibility of charitable acts (D64) | motivation to engage in prosocial behaviors (D64) |
| increased visibility of good deeds (D64) | diminished intrinsic motivation (D91) |