29 Pages Posted: 26 Mar 2010
Date Written: March 17, 2010
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, Socially Responsible Investment, Image Concerns, Shareholder Value
JEL Classification: D64, D78, H41, L31
Suggested Citation: Suggested Citation
Tirole, Jean and Bénabou, Roland, Individual and Corporate Social Responsibility (March 17, 2010). FEEM Working Paper No. 23.2010. Available at SSRN: https://ssrn.com/abstract=1573694 or http://dx.doi.org/10.2139/ssrn.1573694
By Alex Edmans