Conspicuous Ethical Consumption

Abstract

This paper considers a group of consumers who have preferences over how a good is produced and distributed, rather its traits alone. Moreover, it is hypothesized that ethical preferences also depend on prices, and that prices inform consumers about the way goods are produced and distributed. The concept of conspicuous ethics is introduced in order to motivate the consumption of ethically produced goods. The paper states the assumptions and conditions representing the consumption behavior of the ethical consumer. It is shown that a price-dependent direct utility function provides the necessary structure in the characterization of the consumption behavior of the ethical consumer.