Strategic Corporate Social Responsibility In The Air Transportation Industry In Mixed Oligopoly

Taiwan’s international airline market is a mixed oligopolistic market where a semi-public firm and a pure private firm compete simultaneously.The government’s privatization of China Airlines will affect the choice of privatized firm and private firm for corporate social responsibility(CSR)strategies.Therefore,it is also very important to study the effects of privatization on CSR and the impact of its business performance on mixed-ownership airlines and pure private airlines in the aviation industry market.This research analyzes the impact of vendor CSR strategy on its business performance under the framework of non-cooperative game.At the same time,it discusses the impact of privatization on CSR strategy.This game participants have government and firms,and build perfect information dynamic games to analyze the impact of government privatization policies on social welfare,CSR and vendor behavior.Our results are as following:1.Under pure oligopoly,when the marginal pollution of products is low,the concern of firms for consumer-oriented CSR is positive,which will increase social welfare.However,both firms are concerned about consumer-oriented CSR and are a prisoner’s dilemma.At the same time,firms pay attention to environmentally-oriented CSR.Both firms do not care about environmentally-oriented CSR.2.Under mixed oligopoly,both firms are concerned about consumer-oriented or environmentally-oriented CSR,which is the best choice for both parties;when the marginal pollution of products is low,the concern of the firms on CSR will lead to an increase in social welfare.At this time,there has been a win-win-win situation for firms,consumers and society.3.Under the privatization of public firm,when the degree of privatization rises,the output of privatized firm declines,the output of private firm rises,and the total output of the market declines.When the marginal pollution process declines and the degree of privatization declines,the optimal weight given by the privatized firm to care for consumer-oriented CSR will decline.In the meanwhile,under the privatization of public firm,the lower the degree of privatization,the higher the level of CSR of private firm concerned with consumer-oriented.4.In the process of privatization,when the marginal pollution of products is low,the degree of interest of privatized firm is positive for environmentally-oriented CSR;private firm is negative for environmentally-oriented CSR;and social welfare has risen.Under mixed oligopoly with only the private firm care about consumer-oriented CSR,the consumer surplus increases,the total profit of the firm decreases,and the total amount of pollution increases;the direction of influence on social welfare is uncertain,when the marginal pollution of products is more at low levels,firm’s concerns about consumer-oriented CSR will increase social welfare.On the whole,when the government adopts a privatization policy for public firm in the air transport industry,and one or both of them adopts CSR,as long as the pollution of the industry is not too large,it will contribute to the rise of social welfare.For private firm,the lower the degree of privatization of privatized firm,the higher the level of CSR of private firm concerned with consumer orientation.For the government,the first task should be to strengthen the research and development of pollution prevention and control,so that the pollution level in the industry is reduced;secondly,to maintain the situation of competition among the citizens in the market;third,in the process of privatization,avoid excessive concern for consumer welfare,resulting in excess market output.