This paper presents a positive theory of corporate social responsibility set in a managerial capitalism context in which managers instead of markets allocate resources, including social expenditures. The theory focuses jointly on the operational management of the firm and on its social...

Two assumptions are used to justify selection of equilibria in stable sets. One assumption requires that a selected set is invariant to addition of redundant strategies. The other is a strong version of backward induction. Backward induction is interpreted as the requirement that behavior...

This paper describes ways that the definition of an equilibrium among players' strategies in a game can be sharpened by invoking additional criteria derived from decision theory. Refinements of John Nash's 1950 definition aim primarily to distinguish equilibria in which implicit commitments are...

We explore the relation between certain multiple-sender cheap-talk signaling games and the corresponding screening or mechanism design games. The existence of fully-revealing equilibria in the signaling game implies the existence of implementable mechanisms that mechanisms that yield a...

We examine Hillas and Kohlberg's conjecture that invariance to the addition of payoff-redundant strategies implies that a backward induction outcome survives deletion of strategies that are inferior replies to all equilibria with the same outcome. That is, invariance and backward induction imply...

An N-player game can be approximated by adding a coordinator who interacts bilaterally with each player. The coordinator proposes strategies to the players, and his payoff is maximized when each player's optimal reply agrees with his proposal. When the feasible set of proposals is finite, a...

Pubic policies such as reguation, antitrust, and international trade are the result of public politics--a competition over who gets what with government the arbiter of that competition. Policies are also chosen by private parties without the command or sanction of government. Private policies...

Interest groups seek to influence economic activity through public and private politics. Public politics takes place in the arenas of public institutions, whereas private politics takes place outside public institutions often in the arena of public sentiment. Private politics refers to action by...

This paper provides an empirical test of a theory that relates corporate financial performance (CFP), corporate social performance (CSP), and social pressure from government and social activist for improved social performance. A three-equation structural model is estimated for a large number of...

We define the class of two-player zero-sum games with payoffs having mild discontinuities, which in applications typically stem from how ties are resolved. For games in this class we establish sufficient conditions for existence of a value of the game and minimax or Nash equilibrium strategies...