Abstract:

As China’s economy evolves and consumer awareness of social responsibility grows， manufacturing firms face more complex markets and increased competition. Many are enhancing their competitiveness while also addressing corporate social responsibility （CSR） within supply chains. However， some still view CSR donations as a financial burden， and may not have fully integrated CSR into their strategic framework. Notably， during crises that demand relief donations， certain competitive manufacturing firms choose to contribute despite recognizing potential drawbacks to their own interests. This raises an important question： what motivates these firms to make such donations？ To address this issue， eight supply chain game models are developed that consider horizontal interactions and manufacturers’ donation-based CSR behavior， and the effects of quality differences and horizontal interactions on manufacturers’ CSR donation decisions， channel members’ performances， consumer surplus， and social welfare under Cournot and Bertrand competition in a competitive supply chain consisting of two retailers and two manufacturers with quality differences are investigated. （i） In both Cournot and Bertrand competition， it is observed that manufacturers are consistently incentivized to engage in CSR donations when their competitors do not. However， when competitors also adopt CSR strategies， the findings reveal that there is a unique Nash equilibrium strategy for manufacturers under Cournot competition， while two Nash equilibrium strategies under Bertrand competition； （ii） When market competition is relatively low， lower product quality disparities could put two manufacturers fall into a Prisoner’s Dilemma in both Cournot and Bertrand competition. This finding is the first to offer a partial explanation of why competitive corporations engage in donation-based CSR—possibly as a result of the Prisoner’s Dilemma—from the standpoint of chain-to-chain competition； （iii） Manufacturers are more motivated to engage in CSR Donation under Cournot competition than that under Bertrand competition； （iv） The high-quality manufacturer is more effective at implementing CSR Donation in Bertrand competition， whereas the low-quality manufacturer is more effective at doing so in Cournot competition； （v） Manufacturer-retailer collaboration in CSR Donation might have a negative impact on the consumer surplus and social welfare under certain conditions. The findings can offer valuable insights for corporate managers， enabling more effective implementation of CSR donations across varying competitive market environments.

Key words: CSR donation, cournot competition, Bertrand competition, chain to chain competition