An evolutionary game theoretic model for analyzing pricing strategy and socially concerned behavior of manufacturers

Abstract

With the growing consciousness of social sustainability, corporate social responsibility (CSR) has become a serious challenge to manufacturers. This paper analytically analyzes pricing strategy and long-term behavior of socially concerned manufacturers through a one-population evolutionary game theory. Considering two main strategies, i.e., non-CSR and CSR, we investigate what strategy will eventually be the best strategy for the manufacturers and which strategy will eventually be chosen by the majority of the manufacturers. Besides, analytical sensitivity analyses and managerial insights are derived which reveal that a socially concerned manufacturer can offer a higher price for its products compared to a profit-maximizing manufacturer. © 2019 Elsevier Ltd