Munich Personal RePEc Archive

Modelling the trade-off between profits and principles

Graafland, J.J. (2002): Modelling the trade-off between profits and principles. Published in: De Economist , Vol. 2, No. 150 (2002): pp. 129-154.


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Corporations discover that social responsibility pays off. However, sometimes doing what is ethical will prove costly to a company. The purpose of this article is to clarify this trade-off by developing an economic model that describes the choice between profits and principles. The model is used to analyse how external factors like a change in consumer interests and competitiveness affect the relationship between profits and principles.

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