"GREEN" MANAGERIAL DELEGATION AND ENVIRONMENTAL CORPORATE SOCIAL RESPONSIBILITY IN DIFFERENT MARKET STRUCTURE

Assuming Cournot competition in a duopoly industry characterized by the presence of polluting production processes, this work studies the firms' choice to engage in Environmental Corporate Social Responsibility (ECSR) (modeled as an investment in cleaning technology) by means of "green" managerial delegation. In other words, a firm hires a manager with preferences for environmental concerns and to whom the firms' owners delegate both sales and the decision with regard to the optimal level of green technology adoption. When the duopoly is the given market structure of the industry, if the environmental sensitivity of the "green" managers is extremely low, then the engagement in ECSR is the firms' dominant strategy, regardless the efficiency level of the available abatement technology. Nonetheless, firms are cast into a prisoner's dilemma situation. On the other hand, if the "green" manager has low - intermediate/intermediate environmental sensitivity levels, then it occurs that either no ECSR, multiple symmetric equilibria, or ECSR engagement emerge in equilibrium, depending on the efficiency levels of the available abatement technology. Finally, if the environmental sensitivity of the managers is adequately high, then firms do not engage in ECSR, regardless of the efficiency level of the abatement technology. When it is considered a market entry game in which the entrant has to follow the established common practice in the industry, it is shown that an incumbent firm can strategically adopt ECSR for entry deterrence reasons. These results provide additional reasons for the recently observed widespread diffusion of ECSR activities related to carbon emissions reductions and their reporting.