The Stakeholder Corporation and Social Welfare

Marc Fleurbaey, Grégory Ponthière

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


The stakeholder (or responsible) firm maximizes the (weighted or un-weighted) sum of the surpluses of its customers and suppliers (includ-ing workers). Although this objective is hard to empirically measure, it can be pursued by simple management rules that rely on constrained profit maximization. Unconstrained profit maximization gives a competitive edge to ordinary firms, but stakeholder firms are better for social welfare and internalize several important effects of their activities on society. Long-term entry decisions should rely on profit modified by Pigouvian pricing of externalities, and this result provides a novel justification for the polluter-pays principle.

Original languageEnglish (US)
Pages (from-to)2556-2594
Number of pages39
JournalJournal of Political Economy
Issue number9
StatePublished - Sep 1 2023
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


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