What is an "ethical consumer?

What will happen to an economy if, magically, information disparity between merchant and consumer is erased?

• To further explain: consumers typically overpay for something when they did not know a better-priced, equal-quality alternative exists which they would have been happy to pay for instead (perhaps a different brand, or from a different store).  Or, in some scenarios a consumer does not know that he/she doesn't actually need something (such as insurance, repair/maintenance suggestion, bundle deals etc.), but buys it and later regrets it.  Or, in some scenarios something is falsely advertised (scam, or simply inferior product) and a better alternative exists, but the consumer does not know it.  In some instances there is a promotion but the consumer does not know about it.  This hypothetical question asks what would happen if somehow every buyer always makes the "best purchase".  Not saying a consumer now calls some dealer to buy direct from China to save a buck on a ten dollar item or something like that.  Not saying a consumer stops buying luxury items/services.  But just a scenario where a consumer never makes an obviously regretful transaction due to lack of information.  Imagine that to be the case across an entire economy.  What would happen?

• Answer:

  Well, first of all there would be no promotions or discounts. What would be the point? You're just going to lose the customer on their next purchase at full price. Instead, prices will drop to the true lowest level and then adjust up and down based on supply and demand. Neither would there be any marketing. You don't need to let your customers know that your product is the better-priced, equal-quality alternative. They already know all of their options. What you didn't ask was the reverse: What if the merchants knew how much you could and were willing to pay? All merchants, as one unit, could demand that price and you would have no alternative. Omniscience works both ways.