Conference Agenda

This paper studies how the organisational structure of markets influences moral consumption behavior in the presence of environmental externalities. Motivated by pressing environmental challenges such as climate change, biodiversity loss, and pollution, the study focuses on markets where purchasing a “moral” product generates a real positive impact through the planting of trees to offset carbon emissions. The experimental markets incorporate network externalities, whereby a consumer’s valuation increases with the number of other consumers purchasing the same product, as in technology markets and environmentally motivated consumption such as electric vehicle adoption. Under these conditions, multiple competitive equilibria exist. The market experiment examines equilibrium convergence and price discovery by varying trading institutions and informational richness, comparing a continuous double auction with a posted offer institution. Results show higher prices under posted offer trading for both moral and standard products, although standard products consistently trade at lower prices. While the share of moral product transactions varies widely across markets and does not differ significantly by institution, overall efficiency is higher under posted offer trading because fewer transactions occur in the double auction markets.