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Market Design and Moral Behavior

Listed author(s):
  • Michael Kirchler

    ()

    (Department of Banking and Finance, University of Innsbruck, 6020 Innsbruck Austria; and Department of Economics, Centre for Finance, University of Gothenburg, 40530 Gothenburg, Sweden)

  • Jürgen Huber

    ()

    (Department of Banking and Finance, University of Innsbruck, 6020 Innsbruck, Austria)

  • Matthias Stefan

    ()

    (Department of Banking and Finance, University of Innsbruck, 6020 Innsbruck, Austria)

  • Matthias Sutter

    ()

    (Department of Economics, University of Cologne, 50923 Cologne, Germany; and Department of Public Finance, University of Innsbruck, 6020 Innsbruck, Austria)

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 double-auction 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. This paper was accepted by Uri Gneezy, behavioral economics .

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File URL: http://dx.doi.org/10.1287/mnsc.2015.2246
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Article provided by INFORMS in its journal Management Science.

Volume (Year): 62 (2016)
Issue (Month): 9 (September)
Pages: 2615-2625

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Handle: RePEc:inm:ormnsc:v:62:y:2016:i:9:p:2615-2625
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  1. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March.
  2. Dan Ariely & Anat Bracha & Stephan Meier, 2009. "Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially," American Economic Review, American Economic Association, vol. 99(1), pages 544-555, March.
  3. Alvin E. Roth, 2002. "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Econometrica, Econometric Society, vol. 70(4), pages 1341-1378, July.
  4. Andrei Shleifer, 2004. "Does Competition Destroy Ethical Behavior?," American Economic Review, American Economic Association, vol. 94(2), pages 414-418, May.
  5. Björn Bartling & Roberto A. Weber & Lan Yao, 2015. "Do Markets Erode Social Responsibility?," The Quarterly Journal of Economics, Oxford University Press, vol. 130(1), pages 219-266.
  6. Bolton, Gary E. & Ockenfels, Axel, 2012. "Behavioral economic engineering," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 665-676.
  7. McCloskey, Deirdre N., 2006. "The Bourgeois Virtues," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226556635, January.
  8. Leibbrandt, Andreas & López-Pérez, Raúl, 2012. "An exploration of third and second party punishment in ten simple games," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 753-766.
  9. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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