The Good Economy: How Ethical Behavior Can Grow the Economy
In This Chapter
Defining ethical behavior
Uncovering the conventional assumptions about ethical production
Introducing a behavioral understanding of ethical production
Examining the importance of the ethical consumer for ethical production
A basic premise of the conventional economic wisdom is that rational people should be and are exclusively motivated by material self-interest. The conventional model pays no attention to nonmonetary factors. Market forces squash any other types of behavior. Also, ethical behavior is not considered to be consistent with rationality.
An important finding of behavioral economics is that consumers, workers, managers, and CEOs persistently engage in ethical behavior without being obligated to do so by the laws of supply and demand. In other words, ethical behavior exists and can be quite important — contrary to what most conventional economists argue.
In this chapter, I explain how rational individuals can and do engage in ethical behavior. In some cases, ethical behavior involves ...