This paper, delivered by Jean Tirole at the London School of Economics, explores the increasing prominence of individual and corporate social responsibility (CSR) as responses to market and distributive failures. It draws on recent developments in psychology and behavioral economics to understand the motivations behind prosocial behavior, which include genuine altruism, social and self-image concerns, and material incentives. The paper discusses three understandings of CSR: a long-term perspective by firms, delegated exercise of prosocial behavior on behalf of stakeholders, and insider-initiated corporate philanthropy. It examines the benefits, costs, and limits of socially responsible behavior for both individuals and firms, highlighting the complex interplay of these factors. The paper also addresses the challenges and opportunities faced by the CSR movement, including the issue of free riding and the need for information to ensure that CSR actions are genuine and effective.This paper, delivered by Jean Tirole at the London School of Economics, explores the increasing prominence of individual and corporate social responsibility (CSR) as responses to market and distributive failures. It draws on recent developments in psychology and behavioral economics to understand the motivations behind prosocial behavior, which include genuine altruism, social and self-image concerns, and material incentives. The paper discusses three understandings of CSR: a long-term perspective by firms, delegated exercise of prosocial behavior on behalf of stakeholders, and insider-initiated corporate philanthropy. It examines the benefits, costs, and limits of socially responsible behavior for both individuals and firms, highlighting the complex interplay of these factors. The paper also addresses the challenges and opportunities faced by the CSR movement, including the issue of free riding and the need for information to ensure that CSR actions are genuine and effective.