Ethical differentiation and market behavior: An experimental approach
AbstractDoes ethical differentiation of products affect market behavior? We examined this issue in triopolistic experimental markets where producers set prices. One producer's costs were higher than the others. In two treatments, the additional costs were attributed to compliance with ethical guidelines. In the third, no justification was provided. Many consumers reduced their experimental gains by purchasing the ethically differentiated products at higher prices. Individual differences were important (business/economics students paid smaller premia). Finally, we speculate about the observed "demand function" for ethics and emphasize using experimental methodology to complement empirical studies in assessing markets for ethically differentiated products.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 66 (2008)
Issue (Month): 2 (May)
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Web page: http://www.elsevier.com/locate/jebo
Other versions of this item:
- Julian Rode & Robin Hogarth & Marc Le Menestrel, 2004. "Ethical differentiation and market behavior: An experimental approach," Economics Working Papers 779, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2006.
- Julian Rode & Robin M. Hogarth & Marc Le Menestrel, 2005. "Ethical differentiation and market behavior: An experimental approach," Working Papers 112, Barcelona Graduate School of Economics.
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory
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