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The Morality of Markets

Author

Listed:
  • Mathias Dewatripont

    (ULB - Université libre de Bruxelles)

  • Jean Tirole

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Scholars and civil society have argued that competition erodes supplier morality. This paper establishes a robust irrelevance result, whereby intense market competition does not crowd out consequentialist ethics; it thereby issues a strong warning against the wholesale moral condemnation of markets and procompetitive institutions. Intense competition, while not altering the behavior of profitable suppliers, may, however, reduce the standards of highly ethical suppliers or not-for-profits, raising the potential need to protect the latter in the marketplace.

Suggested Citation

  • Mathias Dewatripont & Jean Tirole, 2024. "The Morality of Markets," Post-Print hal-04695298, HAL.
    • Handle: RePEc:hal:journl:hal-04695298
    DOI: 10.1086/729445
    Note: View the original document on HAL open archive server: https://hal.science/hal-04695298v1
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    References listed on IDEAS

    as
    1. Nava Ashraf & Oriana Bandiera & Edward Davenport & Scott S. Lee, 2020. "Losing Prosociality in the Quest for Talent? Sorting, Selection, and Productivity in the Delivery of Public Services," American Economic Review, American Economic Association, vol. 110(5), pages 1355-1394, May.
    2. Hart, Oliver & Zingales, Luigi, 2017. "Companies Should Maximize Shareholder Welfare Not Market Value," Journal of Law, Finance, and Accounting, now publishers, vol. 2(2), pages 247-275, November.
    3. Joel Mokyr, 2016. "A Culture of Growth: The Origins of the Modern Economy," Economics Books, Princeton University Press, edition 1, number 10835.
    4. Satz, Debra, 2010. "Why Some Things Should Not Be for Sale: The Moral Limits of Markets," OUP Catalogue, Oxford University Press, number 9780195311594, Decembrie.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Pol Campos-Mercade & Claes Ek & Magnus Soderberg & Florian H. Schneider, 2025. "Social Preferences and Environmental Externalities," CESifo Working Paper Series 11895, CESifo.
    2. Federico M. Accursi & Raúl Bajo-Buenestado & Raul Bajo-Buenestado, 2024. "Do Cooperatives Exercise Market Power? Evidence from Pass-Through to Retail Prices," CESifo Working Paper Series 11473, CESifo.
    3. Bond, Philip & Levit, Doron, 2025. "ESG: A panacea for market power?," Journal of Financial Economics, Elsevier, vol. 165(C).
    4. Campos-Mercade, Pol & Ek, Claes & Söderberg, Magnus & Schneider, Florian, 2025. "Social Preferences and Environmental Externalities," Working Papers 2025:6, Lund University, Department of Economics.

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    More about this item

    Keywords

    Competition; Consequentialism; Replacement logic; Non-profits; Corporate social responsability; Race to the ethical bottom;
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