Morals and Markets
Of Mice and Markets
Some goods, such as widgets, are freely bought and sold in markets without protest, whereas others, such as indulgences, are not. Some mice that have been bred for use in laboratory experiments turn out to be surplus to requirements and are subsequently sacrificed. Falk and Szech (p. 707) studied the effect that marketplace negotiation has had on experimental subjects' willingness to pay for the upkeep of these surplus mice. Individuals were willing to pay much more to save the mice, but market-like exchanges lowered these prices.
Abstract
The possibility that market interaction may erode moral values is a long-standing, but controversial, hypothesis in the social sciences, ethics, and philosophy. To date, empirical evidence on decay of moral values through market interaction has been scarce. We present controlled experimental evidence on how market interaction changes how human subjects value harm and damage done to third parties. In the experiment, subjects decide between either saving the life of a mouse or receiving money. We compare individual decisions to those made in a bilateral and a multilateral market. In both markets, the willingness to kill the mouse is substantially higher than in individual decisions. Furthermore, in the multilateral market, prices for life deteriorate tremendously. In contrast, for morally neutral consumption choices, differences between institutions are small.
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Supplementary Material
Summary
Supplementary Text
Figs. S1 and S2
Tables S1 and S2
References (40, 41)
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References and Notes
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See supplementary materials for details.
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Comparable demonstration videos showing the killing process are publicly available at laboratories conducting animal research. The video presented to subjects showed how mice are gassed.
18
This information is irrelevant for the consequences of subjects’ decisions. If they choose to save their mouse, the mouse survives. If they decide to kill it, they receive money and the mouse is killed. We could have introduced another framing, informing subjects about the existence of “surplus” mice. Although this would not have changed any consequences, it may have changed the perception of the situation at hand, e.g., in line with evidence on the so-called omission-commission bias; see, e.g., (37).
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Median and modal prices in the bilateral market are 10 euros. Of all trades, 80.7% were in the range of 9 to 11 euros. In the multilateral market, all prices were below or equal to 10 euros, with one exception of a price of 10.1 euros.
27
The average price level in the bilateral market is 4.7 euros higher than in the multilateral market (P < 0.0001, n = 468, random fixed effects regression, with clustered standard errors on session level).
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K. Arrow (39) points out that markets may require high levels of “professional ethics” (p. 36) to perform complex transactions under private information.
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Published In
Science
Volume 340 | Issue 6133
10 May 2013
10 May 2013
Copyright
Copyright © 2013, American Association for the Advancement of Science.
Submission history
Received: 16 October 2012
Accepted: 14 March 2013
Published in print: 10 May 2013
Acknowledgments
We thank F. Kosse and S. Walter for excellent research assistance. For technical, programming, or administrative support, we thank in particular M. Antony as well as T. Deckers, U. Fischbacher, H. Gerhardt, B. Jendrock, J. Radbruch, S. Schmid, and B. Vogt. We also thank J. Abeler, K. Albrecht, S. Altmann, J. Costard, T. Dohmen, M. Gabriel, S. Gächter, H.-M. von Gaudecker, J. von Hagen, D. Harsch, P. Heidhues, D. Huffman, S. Jäger, S. Kube, G. Loewenstein, C. May, A. Oswald, F. Rosar, N. Schweizer, A. Shaked, G. Wagner, M. Wibral, F. Zimmermann, and participants at various seminars for helpful comments. Finally, we thank all students, colleagues, and post-docs for helping to run the experiments. We acknowledge financial support by the German Science Foundation (Deutsche Forschungsgemeinschaft) through the Leibniz Program. Data reported in the paper are available at www.cens.uni-bonn.de/experiments/falk-szech/. This study was approved by the Ethics Committee of the University of Bonn (reference no. 066/12).
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