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Moral Costs and Rational Choice: Theory and Experimental Evidence

Author

Listed:
  • James C. Cox
  • John A. List
  • Michael Price
  • Vjollca Sadiraj
  • Anya Samek

Abstract

The literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics-the contraction axiom-within a sharing framework. Making use of more than 325 dictators participating in a series of allocation games, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with moral reference points to explain our experimental data. Our theory also organizes the broader sharing patterns in the received literature.

Suggested Citation

  • James C. Cox & John A. List & Michael Price & Vjollca Sadiraj & Anya Samek, 2016. "Moral Costs and Rational Choice: Theory and Experimental Evidence," Experimental Economics Center Working Paper Series 2016-02, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised Aug 2019.
  • Handle: RePEc:exc:wpaper:2016-02
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    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2016-02.pdf
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    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2017-07.pdf
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    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2019-02.pdf
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    Cited by:

    1. Lind, Jo Thori & Nyborg, Karine & Pauls, Anna, 2019. "Save the planet or close your eyes? Testing strategic ignorance in a charity context," Ecological Economics, Elsevier, vol. 161(C), pages 9-19.
    2. Andreoni, James & Kuhn, Michael A. & List, John A. & Samek, Anya & Sokal, Kevin & Sprenger, Charles, 2019. "Toward an understanding of the development of time preferences: Evidence from field experiments," Journal of Public Economics, Elsevier, vol. 177(C), pages 1-1.
    3. Panizza, Folco & Vostroknutov, Alexander & Coricelli, Giorgio, 2019. "Meta-Context and Choice-Set Effects in Mini-Dictator Games," Research Memorandum 010, Maastricht University, Graduate School of Business and Economics (GSBE).
    4. Thomas Neumann & Sabrina Kierspel & Ivo Windrich & Roger Berger & Bodo Vogt, 2018. "How to Split Gains and Losses? Experimental Evidence of Dictator and Ultimatum Games," Games, MDPI, Open Access Journal, vol. 9(4), pages 1-19, October.
    5. Xi Zhi Lim, 2021. "Ordered Reference Dependent Choice," Papers 2105.12915, arXiv.org, revised Sep 2021.
    6. Daniel Woods & Maroš Servátka, 2019. "Nice to you, nicer to me: Does self-serving generosity diminish the reciprocal response?," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 506-529, June.
    7. Faillo, Marco & Rizzolli, Matteo & Tontrup, Stephan, 2019. "Thou shalt not steal: Taking aversion with legal property claims," Journal of Economic Psychology, Elsevier, vol. 71(C), pages 88-101.
    8. Cox, Caleb & Korenok, Oleg & Millner, Edward & Razzolini, Laura, 2018. "Giving, taking, earned money, and cooperation in public good games," Economics Letters, Elsevier, vol. 171(C), pages 211-213.
    9. Czap, Hans J. & Czap, Natalia V. & Burbach, Mark E. & Lynne, Gary D., 2018. "Does Might Make Right? An Experiment on Assigning Property Rights," Ecological Economics, Elsevier, vol. 150(C), pages 229-240.

    More about this item

    Keywords

    experiment; giving; taking; altruism; moral cost;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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