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Self-Esteem, Moral Capital, and Wrongdoing

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  • Ernesto Dal Bó
  • Marko Terviö

Abstract

We present an infinite-horizon model of moral standards where self-esteem and unconscious drives play key roles. In the model, an individual receives random temptations (such as bribe offers) and must decide which to resist. Individual actions depend both on conscious intent and a type reflecting unconscious drives. Temptations yield consumption value, but keeping a good self-image (a high belief of being the type of person that resists) yields self-esteem. We identify conditions for individuals to build an introspective reputation for goodness ("moral capital") and for good actions to lead to a stronger disposition to do good. Bad actions destroy moral capital and lock-in further wrongdoing. Economic shocks that result in higher temptations have persistent effects on wrongdoing that fade only as new generations replace the shocked cohorts. Small parametric differences across societies may lead to large wrongdoing differentials, and societies with the same moral fundamentals may display different wrongdoing rates depending on how much past luck has polarized the distribution of individual beliefs. The model illustrates how optimal deterrence may change under endogenous moral costs and how wrongdoing may be compounded as high temptation activities attract individuals with low moral capital.

Suggested Citation

  • Ernesto Dal Bó & Marko Terviö, 2008. "Self-Esteem, Moral Capital, and Wrongdoing," NBER Working Papers 14508, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14508
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    Cited by:

    1. Nadine Chlass & Peter G. Moffatt, 2017. "Giving in dictator games: Experimenter demand effect or preference over the rules of the game?," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-05, School of Economics, University of East Anglia, Norwich, UK..
    2. S. Nageeb Ali, 2011. "Learning Self-Control," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 857-893.
    3. Augenblick, Ned & Cunha, Jesse M. & Dal Bó, Ernesto & Rao, Justin M., 2016. "The economics of faith: using an apocalyptic prophecy to elicit religious beliefs in the field," Journal of Public Economics, Elsevier, vol. 141(C), pages 38-49.

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • Z1 - Other Special Topics - - Cultural Economics

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