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

Abstract

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.

Ethics, Morality, and Game Theory

“…Van Basshuysen [10] and Baumann and Friehe [11] devote their theoretical analyses to problems currently discussed in applied ethics. Van Basshuysen uses the framework of matching theory to study how policies regulating refugee distribution to host countries could be designed to take both host countries' and refugees' preferences into account.…”