Ethics, Welfare, and Markets: An Economic Analysis

Sergio Lence and Dermot Hayes

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: The present article examines society's welfare when goods with identical physical attributes can be produced using two alternative technologies, one of them less ethically desirable but less expensive for at least some producers. For the scenario where identification costs must be borne by producers and consumers of the high-quality good, the outcome under unregulated markets is identical to the optimal solution of a central planner constrained to neither ban the undesirable technology nor segregate the low-quality good. However, under certain circumstances the unregulated market equilibrium may be improved upon by government intervention that shifts the burden of identification costs to the producers of the low-quality good, or which bans the production of the low-quality good. The optimal intervention needs to be determined case-by-case and depends on consumer preferences, relative production costs, and relative costs of identification and fraud prevention

Date: 2010-05-13
References: Add references at CitEc
Citations:

Published in Southern Economic Journal, April 2010, vol. 76 no. 4, pp. 1107-1130

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Ethics, Welfare, and Markets: An Economic Analysis (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:31489

Access Statistics for this paper

More papers in Staff General Research Papers Archive from Iowa State University, Department of Economics Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070. Contact information at EDIRC.
Bibliographic data for series maintained by Curtis Balmer ().