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 participants playing the role of consumers reduced their experimental gains by purchasing the ethically differentiated product at a higher price whether or not they knew the amount of extra cost. Individual differences were important (students of business/economics paid smaller premia than others). Finally, we speculate about the observed "demand function" for ethics and emphasize the use of experimental methodology to complement empirical studies designed to assess the potential market for ethically differentiated products.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 112.
Date of creation: Dec 2005
Date of revision:
Fair trade; ethical premia; price competition; contextual effects;
Other versions of this item:
- Rode, Julian & Hogarth, Robin M. & Le Menestrel, Marc, 2008. "Ethical differentiation and market behavior: An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 265-280, May.
- 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.
- 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bjorner, Thomas Bue & Hansen, L.G.Lars Garn & Russell, Clifford S., 2004.
"Environmental labeling and consumers' choice--an empirical analysis of the effect of the Nordic Swan,"
Journal of Environmental Economics and Management,
Elsevier, vol. 47(3), pages 411-434, May.
- Thomas Bue Bjorner & Lars Garn Hansen & Clifford S. Russell, 2002. "Environmental Labelling and Consumer's Choice - An Empirical Analysis of the Effect of the Nordic Swan," Vanderbilt University Department of Economics Working Papers 0203, Vanderbilt University Department of Economics.
- P. De Pelsmacker & L. Driesen & G. Rayp, 2003. "Are fair trade labels good business ? Ethics and coffee buying intentions," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/165, Ghent University, Faculty of Economics and Business Administration.
- Anthony M. Yezer & Robert S. Goldfarb & Paul J. Poppen, 1996. "Does Studying Economics Discourage Cooperation? Watch What We Do, Not What We Say or How We Play," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 177-186, Winter.
- Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, vol. 16(2), pages 181-191, October.
- John A. List & Robert P. Berrens & Alok K. Bohara & Joe Kerkvliet, 2004. "Examining the Role of Social Isolation on Stated Preferences," American Economic Review, American Economic Association, vol. 94(3), pages 741-752, June.
- Robin Hogarth, 2004.
"The challenge of representative design in psychology and economics,"
Economics Working Papers
751, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2005.
- Robin Hogarth, 2005. "The challenge of representative design in psychology and economics," Journal of Economic Methodology, Taylor and Francis Journals, vol. 12(2), pages 253-263.
- Glenn W. Harrison & John A. List, 2004.
Journal of Economic Literature,
American Economic Association, vol. 42(4), pages 1009-1055, December.
- Larrick, Richard P. & Nisbett, Richard E. & Morgan, James N., 1993. "Who Uses the Cost-Benefit Rules of Choice? Implications for the Normative Status of Microeconomic Theory," Organizational Behavior and Human Decision Processes, Elsevier, vol. 56(3), pages 331-347, December.
- Robert H. Frank & Thomas Gilovich & Dennis T. Regan, 1993. "Does Studying Economics Inhibit Cooperation?," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 159-171, Spring.
- Dufwenberg, Martin & Gneezy, Uri, 1998.
"Price Competition and Market Concentration: An Experimental Study,"
Working Paper Series
1998:8, Uppsala University, Department of Economics.
- Dufwenberg, Martin & Gneezy, Uri, 2000. "Price competition and market concentration: an experimental study," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 7-22, January.
- Dufwenberg, M. & Gneezy, U., 1998. "Price competition and market concentration: An experimental study," Discussion Paper 1998-27, Tilburg University, Center for Economic Research.
- Dufwenberg, M. & Gneezy, U., 1998. "Price Competition and Market COncentration: An Experimental Study," Papers 1998-08, Uppsala - Working Paper Series.
- Dufwenberg, Martin & Gneezy, Uri, 1999. "Price Competition and Market Concentration: An experimental Study," Research Papers in Economics 1999:4, Stockholm University, Department of Economics.
- repec:feb:artefa:0034 is not listed on IDEAS
- repec:cup:cbooks:9780521632010 is not listed on IDEAS
- Andrei Shleifer, 2004.
"Does Competition Destroy Ethical Behavior?,"
American Economic Review,
American Economic Association, vol. 94(2), pages 414-418, May.
- repec:cup:cbooks:9780521635677 is not listed on IDEAS
- David J. Cooper, 1999. "Gaming against Managers in Incentive Systems: Experimental Results with Chinese Students and Chinese Managers," American Economic Review, American Economic Association, vol. 89(4), pages 781-804, September.
- Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-60, June.
- Basu, Arnab K. & Hicks, Robert L., 2008. "Label Performance and the Willingness to Pay for Fair Trade Coffee: A Cross-National Perspective," Discussion Papers 44336, University of Bonn, Center for Development Research (ZEF).
- Fabrice Etilé & Sabrina Teyssier, 2012. "Signaling Corporate Social Responsibility: Third-Party Certification vs. Brands," PSE Working Papers halshs-00736551, HAL.
- Thuriane Mahé, 2010. "Are Stated Preferences Confirmed by Purchasing Behaviours? The Case of Fair Trade-Certified Bananas in Switzerland," Journal of Business Ethics, Springer, vol. 92(2), pages 301-315, April.
- Rode, Julian, 2007. "Truth and Trust in Communication: An Experimental Study of Behavior under Asymmetric Information," Ratio Working Papers 111, The Ratio Institute.
- Freitas, Luiz & Wagner, Jeffrey, 2009. "The uncertain moral context of price changes," Ecological Economics, Elsevier, vol. 68(4), pages 1100-1105, February.
- repec:hal:wpaper:halshs-00736551 is not listed on IDEAS
- Veronika Andorfer & Ulf Liebe, 2012. "Research on Fair Trade Consumption—A Review," Journal of Business Ethics, Springer, vol. 106(4), pages 415-435, April.
- MacKerron, George J. & Egerton, Catrin & Gaskell, Christopher & Parpia, Aimie & Mourato, Susana, 2009. "Willingness to pay for carbon offset certification and co-benefits among (high-)flying young adults in the UK," Energy Policy, Elsevier, vol. 37(4), pages 1372-1381, April.
- Etile, Fabrice & Teyssier, Sabrina, 2011. "Corporate and Consumer Social Responsibilities: Label Regulations in the Lab," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 120399, European Association of Agricultural Economists.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruno Guallar).
If references are entirely missing, you can add them using this form.