More Money, More Problems? Can High Pay be Coercive and Repugnant?

Abstract

IRBs can disallow high incentives they deem coercive. A vignette study on MTurk concerning participation in medical trials shows that a substantial minority of subjects concurs. They think high incentives cause more regret, and that more people would be better off without the opportunity to participate. We model observers as judging the ethicality of incentives by partially using their own utility. The model predicts that payments are repugnant only to the extent that they affect the participation decision, and more so for larger transactions. Incentivizing poorer participants is more repugnant, and in-kind incentives are less repugnant than monetary incentives.

Marketplaces, Markets, and Market Design

“…98 The idea that high payments can be coercive (and that people can be exploited by offering them too much money) is one that often causes economists and ethicists to speak at cross purposes. Ambuehl, Niederle, and Roth (2015) find that a non-trivial minority of surveyed subjects share this intuition, a result replicated and extended by Leuker et al (2018). Ambuehl (2017), Ambuehl and Ockenfels (2017), and Ambuehl, Ockenfels, and Stewart (2018) explore the way large payments change not only the decision but the decision processes of experimental subjects, and draw conclusions about how informed consent faces extra challenges when the payments are very salient.…”

“…25 Finally, note that some marketplaces in a larger market may be repugnant, in the sense that although they are attractive to some participants, others not only don't wish to participate themselves but think that such marketplaces should not operate at all (Roth 2007). This kind of repugnance can occur even in the absence of easily measurable negative externalities to those who would like to eliminate such a marketplace (Ambuehl, Niederle, and Roth 2015). The kidney transplant marketplaces I'll discuss later have been fundamentally shaped by the repugnance, enshrined in law, toward buying and selling organs.…”

Testing for Repugnance in Economic Transactions: Evidence from Guest Work in the Gulf

“…3 Equilibrium e ects are a focus of Genicot (2002), Basu (2007), Satz (2008), and von Lilienfeld-Toal and Mookherjee (2010): For example, the existence of the option to place oneself into indentured servitude could inhibit the development of markets for loans that would, if they existed, be preferred those now voluntarily choosing indenture. Brekke et al (2003), Ambuehl et al (2015) and Ambuehl (2017) model degradation with mechanisms by which seemingly intrinsic preferences to engage in a transaction can be endogenous to the strength of extrinsic incentives.…”

Testing for Repugnance in Economic Transactions: Evidence from Guest Work in the Gulf

“…3 Equilibrium e ects are a focus of Genicot (2002), Basu (2007), Satz (2008), and von Lilienfeld-Toal and Mookherjee (2010): For example, the existence of the option to place oneself into indentured servitude could inhibit the development of markets for loans that would, if they existed, be preferred those now voluntarily choosing indenture. Brekke et al (2003), Ambuehl et al (2015) and Ambuehl (2017) model degradation with mechanisms by which seemingly intrinsic preferences to engage in a transaction can be endogenous to the strength of extrinsic incentives.…”