Doing the right thing (or not) in a lemons-like situation: on the role of social preferences and Kantian moral concerns

We conduct a laboratory experiment using framing to assess the willingness to “sell a lemon†, i.e., to undertake an action that benefits self but hurts the other (the “buyer†). We seek to disentangle the role of other-regarding preferences and (Kantian) moral concerns, and to test if it matters whether the decision is described in neutral terms or as a market situation. When evaluating an action, morally motivated individuals consider what their own payoff would be if—hypothetically—the roles were reversed and the other subject chose the same action (universalization). We vary the salience of role uncertainty, thus varying the ease for participants to envisage the role-reversal scenario. We find that subjects are (1) more likely to “sell a lemon†in the market frame, and (2) less likely to do so when the role uncertainty is salient. We also structurally estimate other-regarding and Kantian moral concern parameters.