Researchers present causal evidence on how markets affect moral values

May 10, 2013

Many people express objections against child labor, exploitation of the workforce or meat production involving cruelty against animals. At the same time, however, people ignore their own moral standards when acting as market participants, searching for the cheapest electronics, fashion or food. Thus, markets reduce moral concerns. This is the main result of an experiment conducted by economists from the Universities of Bonn and Bamberg. The results are presented in the latest issue of the renowned journal Science.

Prof. Dr. Falk from the University of Bonn and Prof. Dr. Nora Szech from the University of Bamberg, both , have shown in an experiment that markets erode concerns. In comparison to non-market decisions, moral standards are significantly lower if people participate in markets.

In markets, people ignore their individual moral standards

"Our results show that market participants violate their own moral standards," says Prof. Falk. In a number of different experiments, several hundred subjects were confronted with the moral decision between receiving a monetary amount and killing a mouse versus saving the life of a mouse and foregoing the monetary amount. "It is important to understand what role markets and other institutions play in making. This is a question economists have to deal with," says Prof. Szech.

"To study immoral outcomes, we studied whether people are willing to harm a third party in exchange to receiving money. Harming others in an intentional and unjustified way is typically considered unethical," says Prof. Falk. The animals involved in the study were so-called "surplus mice", raised in laboratories outside Germany. These mice are no longer needed for research purposes. Without the experiment, they would have all been killed. As a consequence of the study many hundreds of young mice that would otherwise all have died were saved. If a subject decided to save a mouse, the experimenters bought the animal. The saved mice are perfectly healthy and live under best possible lab conditions and medical care.

Simple bilateral markets affect moral decisions

A subgroup of subjects decided between life and money in a non-market decision context (individual condition). This condition allows for eliciting moral standards held by individuals. The condition was compared to two market conditions in which either only one buyer and one seller (bilateral market) or a larger number of buyers and sellers (multilateral market) could trade with each other. If a market offer was accepted a trade was completed, resulting in the death of a mouse. Compared to the individual condition, a significantly higher number of subjects were willing to accept the killing of a mouse in both market conditions. This is the main result of the study. Thus markets result in an erosion of moral values. "In markets, people face several mechanisms that may lower their feelings of guilt and responsibility," explains Nora Szech. In market situations, people focus on competition and profits rather than on moral concerns. Guilt can be shared with other traders. In addition, people see that others violate moral norms as well.

"If I don't buy or sell, someone else will."

In addition, in markets with many buyers and sellers, subjects may justify their behavior by stressing that their impact on outcomes is negligible. "This logic is a general characteristic of markets," says Prof. Falk. Excuses or justifications appeal to the saying, "If I don't buy or sell now, someone else will." For morally neutral goods, however, such effects are of minor importance. Nora Szech explains: "For goods without moral relevance, differences in decisions between the individual and the market conditions are small. The reason is simply that in such cases the need to share guilt or excuse behavior is absent."

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More information: Morals and Markets, Science, DOI: 10.1126/science.1231566

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User comments : 8

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betterexists
1.2 / 5 (5) May 10, 2013
Superior Alternative to Higher Taxes for the Super Rich:

1 Ordinary Price for the most
+
1 Voluntarily Acceptable High Price for the Super Rich

Just keep the Info Private from Everybody around....even from the shop owner.

The extra money should be channeled through the Credit cards DIRECT to the Manufacturers.....i.e NOTHING Extra to the Retailers.
bardgd
1 / 5 (3) May 10, 2013
To much gray area which to me sounds like excuses. An individual, is ethical or not ethical before they ever approach the market. The market takes advantage of the limited ethics of the individual. The ethical individual who has moral standards will ignore the quandary of even making a poor decision and will not allow themselves to be used or taken advantage of by the market. Whereas the individual of questionable ethics will happily transverse the road of deception not realizing the errors or miss-information. The bottom line only those individuals of questionable ethics will be measured.

Before you can even test an individuals reaction to the market, a base line has to be established.
ormondotvos
1 / 5 (4) May 10, 2013
Markets are used by real people, not "ethical" people. Ethics is not ideological, but physiological. We FEEL what's right and wrong in normal life. The combinatorial explosion prevents making ethical decisions logically.
VendicarE
3 / 5 (2) May 10, 2013
Ethics is just one component in the decision vector. Adding additional dimensions will necessarily reduce the relative weighting of the ethics component.
ForFreeMinds
1.7 / 5 (6) May 11, 2013
The idea that this experiment, where a mouse is killed, is harming a "third party" is quite a leap of logic. Many would find killing a mouse to be of benefit to society. Seems to me the researchers were looking for a reason to trash markets. And exactly how does a transaction between two people affect a third party? Or is the third party a participant in the transaction? Here, the researcher is paying people to choose to have a mouse killed. I'm sure a lot of people would prefer this service to an exterminator since they get paid to choose it rather than paying the exterminator.

Markets involve voluntary transactions (including children who voluntarily want to work and do), while the alternative involves the use of force. What can be more moral than a voluntary transaction, as compared to one where a gun is used to force a transaction? This study is hogwash.
betterexists
1 / 5 (4) May 11, 2013
The Super Rich can always claim the extra-payment at the end of the year as Charity. Subscribing to Unproductive things may thus be replaced with encouragement to enterprising Manufacturers......with the hope of returning that money eventually to the helpless.
betterexists
1 / 5 (4) May 11, 2013
Since there are gradations of Richness.....and gradations of Intentions to pay that Extra amount.......it may be adapted percentage-wise or based on the appreciation of the Product....i.e. on an individual situation basis.
VendicarE
5 / 5 (1) May 11, 2013

"Many would find killing a mouse to be of benefit to society." - ForFreeMinds

I can think of no moral person who would believe such a thing.

Libertarian/Randite - ForFreeMinds - clearly does. Perhaps this explains why he is a Libertarian.