Consumer activism, producer groups, and production standards

Noe, Thomas and Rebello, Michael (1995) Consumer activism, producer groups, and production standards. Journal of Economic Behavior and Organization, 27 (1). pp. 69-85.


We examine competition between groups of producers when consumers prefer costly `ethical' production technologies. Consumers are unable to identify or monitor production technologies. Producers can freeride on their group's `reputation' by substituting cheaper `unethical' technologies. When an ethical technology is Pareto-optimal, social pressures within competing producer groups can ensure long-run dominance of groups relying most heavily on the ethical technology. Even if social pressures cannot support the choice of the ethical technology in the long run, competition between producer groups can increase the average level of adoption of the ethical technology for an arbitrarily long period of time.

Item Type: Article
Keywords: business ethics, consumer activism, producer groups, production standards, finance
Subject(s): Finance
Date Deposited: 10 Nov 2011 15:46
Last Modified: 24 Sep 2018 15:31
Funders: N/A

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