We model firms as competing for socially responsible consumers by linking the provision of a public good (environmentally friendly or socially responsible activities) to sales of their private goods. In many cases, too little of the public good is provided, but under certain conditions,...

Recent policy discussions have debated whether governments should treat state-owned and private enterprises equally or adopt different policies towards each type of enterprise. Such questions are pertinent for difficult economic climates in which government subsidy towards struggling state-owned...