Ethical Differentiation and Consumption
in an Incentivized Market Experiment
Published online: 4 March 2015
Ó Springer Science+Business Media New York 2015
Abstract In surveys consumers express preferences for ethical goods. Some au-
thors claim, however, that survey responses do not translate into actual costly
purchase behavior. To study if ethical consumption and differentiation occur in an
incentive-compatible setting, this paper implements a design of an incentivized
market experiment, which has been studied in the context of homogenous goods and
both theoretically and experimentally engenders a dynamic of price decrease. This
experiment establishes that ethical differentiation can be an effective strategy for
sellers with ethically motivated buyers; and, although there is an ethical price
premium, it accrues to the charity rather than to the seller.
Keywords Economic experiments Á Ethical consumption Á Ethical differentiation Á
Ethical goods Á Price competition
Ethical concerns are regularly revealed in consumer surveys. Studies on ethical
consumption that rely on survey answers are however limited by the absence of
incentive compatibility and attitudes may not necessarily translate into actions.
Some authors have even called into question the existence of the ‘‘ethical
consumer’’ as a result of an attitude–behavior gap (Devinney et al. 2010;
Boulstridge and Carrigan 2000).
Electronic supplementary material The online version of this article (doi:10.1007/s11151-015-9455-2)
contains supplementary material, which is available to authorized users.
M. Valente (&)
NIMA (Applied Microeconomics Research Unit), Departamento de Economia, Escola de Economia
o, Universidade do Minho, Campus de Gualtar, 4710-057 Braga, Portugal
Rev Ind Organ (2015) 47:51–69