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Moral Rules and the Moral Sentiments: Toward a Theory of an Optimal Moral System

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Louis Kaplow
Steven Shavell

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Abstract

We examine how moral sanctions and rewards, notably the moral sentiments involving feelings of guilt and virtue, would be employed to govern individuals' behavior if the objective were to maximize social welfare. In our model, we analyze how the optimal use of guilt and virtue is influenced by the nature of the behavior under consideration, the costs of inculcating moral rules, constraints on the capacity to experience guilt and virtue, the fact that guilt and virtue often must be applied to groups of acts rather than be tailored to every conceivable type of act, and the direct effect of feelings of guilt and virtue on individuals' utility. We also consider a number of ways that the model could be extended, discuss the extent to which our analysis is consistent with the observed use of guilt and virtue, and relate our conclusions to longstanding philosophical debates about morality.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8688.

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Date of creation: Dec 2001
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Handle: RePEc:nbr:nberwo:8688

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D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
D62 - Microeconomics - - Welfare Economics - - - Externalities

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  1. Emrah Arbak, 2005. "Social status and crime," Working Papers 0510, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure. [Downloadable!]
  2. Benito Arrunada, . "Catholic Confessions of Sin as Third Party Moral Enforcement," Gruter Institute Working Papers on Law, Economics, and Evolutionary Biology 3-1-1013, Berkeley Electronic Press. [Downloadable!]
  3. Hongbin Li & Mark Rosenzweig & Junsen Zhang, 2008. "Altruism, Favoritism, and Guilt in the Allocuation of Family Resources: Sophie's Choice in Mao's Mass Send Down Movement," Working Papers 965, Economic Growth Center, Yale University. [Downloadable!]
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  4. Benito Arruñada, 2003. "Specialization and Rent-Seeking in Moral Enforcement: The Case of Confession," Economics Working Papers 653, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2009. [Downloadable!]
  5. Juan Perote Peña, 2003. "Ethical Implementation and the Creation of Moral Values," Economic Working Papers at Centro de Estudios Andaluces E2003/25, Centro de Estudios Andaluces. [Downloadable!]
  6. Benito Arruñada, 2004. "The Economic Effects of Christian Moralities," Economics Working Papers 743, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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