Market Design and Moral Behavior

Abstract

Market Design and Moral Behavior *In an experiment with 739 subjects we study whether and how different interventions might have an influence on the degree of moral behavior when subjects make decisions that can generate negative externalities on uninvolved parties. Particularly, subjects can either take money for themselves or donate it to UNICEF for measles vaccines. By considering two fairly different institutional regimes -one with individual decision making, one with a doubleauction market -we expose the different interventions to a kind of robustness check. We find that the threat of monetary punishment promotes moral behavior in both regimes. Getting subjects more involved with the traded good has no effect, though, in both regimes. Only the removal of anonymity, thus making subjects identifiable, has different effects across regimes, which we explain by different perceptions of responsibility.

Groups and socially responsible production: An experiment with farmers

“…It complements research on group decision-making by separating the impacts of collective decision-making and collective payoffs on SR behavior. In line with previous studies, I find that decisions made by groups are less SR than decisions made individually (Charness et al 2007, Falk and Szech 2013, Kirchler et al 2016, Irlenbusch and Saxler 2019. In addition, firms often face choosing between non-SR options that increase profits for their firms and shareholders and SR options, which reduce profits.…”

“…As in Irlenbusch and Saxler (2019) and Kirchler et al (2016), this choice requires the participants to choose in a choice list setting between forgoing a bonus to make a donation (SR) and creating a negative externality for the uninvolved third party by opting to receive the bonus and not donate (non-SR). The negative externality was held constant at e5 to analyze the subjective cost participants assigned to non-SR behavior.…”

“…When individuals incur a cost when producing negative externalities or choosing non-SR behavior, that cost can be shared when such decisions are made by groups and their choices cannot be imputed from the results (Dana et al 2007, Kirchler et al 2016, Irlenbusch and Saxler 2019, Weisel and Shalvi 2015, Rothenhäusler et al 2018.…”

“…Numerous studies report that collective decision-making reduces SR behavior, suggesting that group decisions diffuse group members' sense of responsibility (Falk and Szech 2013, Kirchler et al 2016, Irlenbusch and Saxler 2019 and thus lead to less SR (Latané and Nida 1981, Kirchler et al 2016, Weisel and Shalvi 2015. Collective payoffs also affect social preferences.…”

Market Design, Human Behavior, and Management

“…For instance, buying and selling kidneys for transplantation or trading school and university admission is illegal in most countries (Roth 2007). Thus, a stream of recent studies is concerned with understanding the empirical nature and robustness of such constraints, to reconcile ethical concerns with economic effectiveness (Ambuehl 2017, Ambuehl et al 2015,b, Leider and Roth 2010, Kirchler et al 2016.…”