In a recent issue of this journal, Ho and Huang (2017) present an interesting and inspiring agency based model on corporate donations, taking into consideration the level of managerial altruism and the impact of donations on demand. However, a number of crucial assumptions of their basic model are open for criticism. They relate to the specification of demand, of profits, and of managerial utility. This is not to say that no insights can be gained from their model, but that when doing so these limitations should be borne in mind.
Bibliographical noteProfessor of managerial economics
- managerial altruism