On Adverse Effects of Consumers’ Attaching Greater Importance to Firms’ Ethical Conduct

Florian Baumann and Tim Friehe
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Florian Baumann: Center for Advanced Studies in Law and Economics (CASTLE), University of Bonn, 53113 Bonn, Germany

Games, 2017, vol. 8, issue 3, 1-7

Abstract: Consumers increasingly care about firms’ ethical conduct (e.g., labor and environmental practices) when making their consumption choices. This note presents a simple framework to highlight the possibility that this development may induce a less desirable production technology choice and bring about lower market transparency. When faced with consumers’ greater moral concerns, more firms may choose an undesirable mode of production and shroud information about it.

Keywords: consumer choice; technology choice; moral conduct; external harm (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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