Group for Research in Decision Analysis

CSR Paradox? - Pricing and Advertising Decisions in a Food Supply Chain

Wenqing Zhang

Consumer food choices are greatly affected by factors such as food prices and advertising. As part of their corporate social responsibility (CSR) programs, some major food companies have adopted advertising initiatives in order to direct consumers towards healthier food choice. We develop game theoretical models to study the impact of such initiatives in food supply chains. We show that the effectiveness of advertising initiatives depends critically on supply chain structures. We discuss the implications of our results on food manufacturers, retailers, consumers, and policy makers.