Capturing moral economic context

Multiple economic experiments suggest that the moral context of consumption and/or production influences willingness-to-pay and willingness-to-accept. Precisely how this influence should be modeled from a theoretical perspective, however, remains understudied. The prevailing view is that moral context can be captured using an extended utility approach in which “morality” enters the utility function as any other attribute of value. However, in our view the literature does not yet suggest practical modeling strategies that yield testable hypotheses. We show herein that the state-dependent preference approach quite naturally enables modeling of the moral concerns registered in experimental settings.