Modeling Fair Trade Adoption in Türkiye: A Behavioral Microeconomic Perspective

İngilizce (OpenAlex)

This study develops a behavioral microeconomic model of Fair Trade adoption that integrates firm- and consumer-level decision mechanisms with policy and institutional dynamics. The framework extends utility theory by incorporating moral utility, institutional trust, and information asymmetry to explain why Fair Trade markets remain underdeveloped in emerging economies such as Türkiye. On the producer side, adoption is modeled as a risk-adjusted optimization problem in which firms balance certification costs, expected price premiums, and reputational gains. On the consumer side, willingness to pay for ethically certified goods depends on income constraints, perceived credibility of certification, and the salience of moral satisfaction. The model identifies multiple equilibria, showing that low trust and high certification costs trap the market in a coordination failure. In contrast, credible institutions and targeted incentives can shift the system toward a high-participation equilibrium. Results show that reductions in certification costs and increases in institutional credibility jointly enhance both consumer demand and producer participation. Applied to the Turkish context, the results indicate that policy interventions—such as the establishment of domestic accreditation agencies, awareness campaigns, and fiscal support for certification—can generate strong network effects that accelerate the diffusion of Fair Trade. The paper contributes to behavioral economics in the topic of sustainability by linking institutional design and moral preferences to market formation, providing policy guidance for developing inclusive and credible ethical trade systems.