Environmental Corporate Social Responsibility (ECSR) in a Price-Set Competition Between Private and State-Owned Hotels

Environmental corporate social responsibility (ECSR) has emerged as a crucial concept in the business world, reflecting a growing recognition of the profound impact of corporate activities on the environment. We will study a model in which two hotels with different objectives must take decisions on environmental CSR policies and on room rates, considering the separation between ownership and management. We will discuss two cases: (i) the SO hotel takes the leader position; (ii) the FP hotel takes the leader position. The study was conducted using game theory techniques. The results allow us to conclude that by adopting environmental CSR, hotels are improving social welfare. In the case that SO hotel acts as a leader, we prove that both hotels adopt environmental CSR, whereas in the case of FP hotel acting as a leader, only the SO hotel (follower) adopts environmental CSR. In both cases, environmental CSR improves social welfare.