The Ethics of Incentivizing the Uninformed: A Vignette Study

Abstract

Our recent working paper (Ambuehl, Ockenfels, and Stewart 2017) shows theoretically and experimentally that people with higher costs of information processing respond more to an increase in the incentive for a complex transaction, and decide to participate based on a worse understanding of its consequences. Here, we address the resulting tradeoff between the principle of informed consent and the principle of free contract. Respondents to our vignette study on oocyte donation overwhelmingly favor the former and support policies that require donors to thoroughly understand the transaction. This finding helps design markets that are not only efficient but also considered ethical.

Marketplaces, Markets, and Market Design

“…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. These papers bridge some of the gap in the discussion of "coercion" in the ethics and economics literatures.…”

“…Ashlagi, Monderer and Tennenholtz 2007). 26 Ambuehl and Ockenfels (2017) investigate how this repugnance might arise from concerns that incentives interfere with informed consent.…”

The Signal of Applying for a Job Under a Vacancy Referral Scheme

“…Vignette experiments have recently been the method of choice for a number of prominent studies in sociology and economics investigating human judgement (Ambuehl and Ockenfels ; Auspurg, Hinz, and Sauer ; Eriksson and Kristensen ; Mathew ; Rivera and Tilcsik ). In particular, this type of experiment has been increasingly used to study dynamics in hiring decisions (Auer et al.…”

What makes a market transaction morally repugnant?

“…(5) Undue influence (Ambuehl, 2017;Elias et al, 2015) "To what extent does the involvement of money have an undue influence on the seller's decision when transacting 8) Risk known to seller (Leuker et al, 2020) "To what extent are the risks known to the seller?" (Completely known ⇔ Completely unknown) Clinical trials ( 9) Understand consequences (Ambuehl & Ockenfels, 2017) "To what extent can the consequences of transacting [TRANSACTION] be fully understood by the seller?" (Fully understandable ⇔ Not understandable at all) Human egg donation (10) Exploitative (Hill, 1994;Roth, 2007) " Various (e.g., prostitution) (11) Objectification (Roth, 2007) "Does putting a price on [TRANSACTION] objectify it or those involved in the transaction?"…”