Moral Hypocrisy in Social Preferences

We propose and axiomatize a decision model of social preferences under risk that highlights moral hypocrisy, which we think of as the motivation to appear moral while avoiding the cost of acting morally to the extent possible (Batson et al., 1997). Our model considers a setup with a decision maker (DM) and one other individual. It highlights how the presence of risk enables the DM to exploit the distinction between the other individual's ex post outcome and his ex-ante opportunity in a self-serving manner and perceive herself as more moral than what her choices warrant. In turn, this allows her to behave more selfishly in the presence of risk than under certainty and, further, be more risk loving over the other individual's risks than her own. Our axiomatization highlights that the DM acts like a motivated Bayesian when assessing risk faced by the other individual, specifically, she underweights the probabilities of unfavorable outcomes that the other individual may receive in her assessments. We show that our model can explain a wide array of experimental evidence on generous behavior under risk.