Can ‘Civil Enterprises’ survive in the market? Some game theoretical considerations on the one-shot game

Civil enterprises (CEs) are firms whose main goal is to produce benefits for the community, working according to a logic of reciprocity. In this paper we discuss, from a game theoretical perspective, as to what extent it is possible for such enterprises to survive in competition with profit-maximizing firms in the marketplace, since market competition might take the form of a prisoner’s dilemma game, where the public good at stake is the commitment to moral rules. In those games cooperative strategies are strictly dominated by the defective behavior of the players, i.e. CEs would not survive while retaining their values. We argue that market competition is more appropriately modelled as an n-firm model and show that, given a sufficient number of CEs in the market, they can survive despite having to interact with for-profit firms, even when the game is played only once.