"Consumption of Values"

with Itzhak Gilboa and Stefania Minardi

Abstract : Consumption decisions are partly influenced by values and ideologies. Consumers care about global warming, child labor, fair trade, etc. Incorporating values into the consumer’s utility function will often violate monotonicity, if consumption hurts values in a way that isn’t offset by hedonic benefits. We distinguish between intrinsic and instrumental values, and argue that the former tend to introduce discontinuities near zero. For example, a vegetarian’s preferences would be discontinuous near zero amount of animal meat. We axiomatize a utility representation that captures such preferences and discuss the measurability of the degree to which consumers care about such values.