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Of morals, markets and mice: Be careful drawing policy conclusions from experimental findings!

Author

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  • Breyer, Friedrich
  • Weimann, Joachim
Abstract
Sometimes experimentalists draw far-reaching policy conclusions from their findings. However, this is dangerous if there is ambiguity with respect to the right interpretation of the results. A good example for this danger is the well-known study by Falk and Szech (Science, 2013), who conclude that “markets erode moral values”. If this were true, economists, who have emphasized the efficiency enhancing effects of markets for centuries, would have to reconsider their judgments fundamentally. In this note we demonstrate that the claim made by Falk and Szech is unfounded for at least four reasons and that their experimental results can be (and should be) interpreted, if anything, in the opposite way.

Suggested Citation

  • Breyer, Friedrich & Weimann, Joachim, 2015. "Of morals, markets and mice: Be careful drawing policy conclusions from experimental findings!," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 387-390.
    • Handle: RePEc:eee:poleco:v:40:y:2015:i:pb:p:387-390
    DOI: 10.1016/j.ejpoleco.2015.06.003
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    References listed on IDEAS

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    1. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
    2. Martin G. Kocher & Matthias Sutter, 2005. "The Decision Maker Matters: Individual Versus Group Behaviour in Experimental Beauty-Contest Games," Economic Journal, Royal Economic Society, vol. 115(500), pages 200-223, January.
    3. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Matthias Sutter & Jürgen Huber & Michael Kirchler & Matthias Stefan & Markus Walzl, 2020. "Where to look for the morals in markets?," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 30-52, March.
    2. Bartling, Björn & Özdemir, Yagiz, 2023. "The limits to moral erosion in markets: Social norms and the replacement excuse," Games and Economic Behavior, Elsevier, vol. 138(C), pages 143-160.
    3. Engelmann, Dirk & Friedrichsen, Jana & Kübler, Dorothea, 2018. "Fairness in Markets and Market Experiments," Rationality and Competition Discussion Paper Series 64, CRC TRR 190 Rationality and Competition.
    4. Bartling, Björn & Fehr, Ernst & Özdemir, Yagiz, 2023. "Does Market Interaction Erode Moral Values?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 105(1), pages 226-235.
    5. Ponthiere, Gregory & Stevens, Nicolas, 2024. "The Morality of Markets. A Comment," GLO Discussion Paper Series 1433, Global Labor Organization (GLO).
    6. Bartling, Björn & Grieder, Manuel & Zehnder, Christian, 2017. "Competitive pricing reduces wasteful counterproductive behaviors," Journal of Public Economics, Elsevier, vol. 156(C), pages 34-47.
    7. Yew-Kwang NG, 2016. "Extending Economic Analysis to Analyze Policy Issues More Broadly," Economic Growth Centre Working Paper Series 1609, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    8. Gehrlein, Jonas & Crede, Ann-Kathrin & Adrian, Nana, 2020. "The impact of markets on moral reasoning: Evidence from an online experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 87(C).
    9. Choi, Ginny Seung & Storr, Virgil Henry, 2023. "The morality of markets in theory and empirics," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 590-607.
    10. Byambadalai, Undral & Ma, Ching-to Albert & Wiesen, Daniel, 2023. "Changing preferences: An experiment and estimation of market-incentive effects on altruism," Journal of Health Economics, Elsevier, vol. 92(C).
    11. Greiff, Matthias & Rusch, Hannes, 2022. "Sharing responsibility for the good," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 101(C).
    12. Undral Byambadalai & Ching-to Albert Ma & Daniel Wiesen, 2019. "Changing Preferences: An Experiment and Estimation of Market-Incentive E§ects on Altruism," Boston University - Department of Economics - Working Papers Series WP2019-11, Boston University - Department of Economics.

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    More about this item

    Keywords

    Erosion of morals; Market ethics; Double auction;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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