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Markets and Morality Does Compe33on Affect Moral Judgment?
Doux Commerce Thesis • Commerce increases morality – Proponents of the so-‐called doux commerce thesis have proposed that a compe33ve market, with its disrup3ve effect on geographical and tribal isola3on, will actually have morally improving effects, increasing our care for and understanding of others • Smith, Montesquieu, Paine, Mill, Hume
• Commerce decreases morality – It has been asserted that compe33on may bring a winner-‐take-‐all mentality and a lack of concern for others or that exposure to market values will lead us to abandon non u3litarian forms of moral thought, trea3ng every moral issue instead in terms of costs and benefits. • Schumpeter, Hayek, Veblen, Marx, Simmel
Market Inalienability • Proper scope of markets
– Markets vs. Government – Markets vs. what should not be on the Market
• China: Driver runs over girl twice because it “cost less to pay off a dead girl’s parents than to pay for hospital expenses”
• India High Court: Life of a person is invaluable and cannot be compensated in terms of money.
– Repugnance of certain transac3ons (Roth 2007, Mankiw and Weinzerl 2010)
• How do markets affect social norms – Whether people become corrupted if commodified – Whether market compe33on makes people immoral (Shleifer AER 2004)
– Li]le empirical and no field experimental research
Research Design
• Does the Structure of Employment Affect Moral A^tudes and Behavior? – Compe33on (tournament) – Commodifica3on (piece rate)
• Moral Values – U3litarian vs. Deontological Values – Other-‐Regarding Preferences – Charitable Dona3ons
Moral Trolley Problem
Bystander
Moral Trolley Problem Footbridge
Theory
• Manipula3on of the affec3ve state alters moral judgment
Theory
• Manipula3on of the affec3ve state alters moral judgment – Nega3ve emo3ons cause deontological responses to moral judgments (Wheatley and Haidt 2005, Schnall, Haidt and Clore 2005) – Posi3ve emo3ons generate u3litarian responses (Valdesolo and DeSteno 2006)
Theory • Market compe33on may be perceived to be unfair early in the course of economic development – causing individuals to become more deontological
• Globaliza3on and market integra3on may make people more moral (Henrich, Boyd, Bowles, Camerer, Fehr, Gin3s, McElreath AER 2001)
• As markets develop – compe33on becomes perceived as fair, triggering posi3ve emo3ons and u3litarian commitments • Meritocracy is considered fair (Zingales 2011): in dictator games, Berkeley students reward hard work while Kenyans did not (Jakiela 2009)
Theory
• If u3litarianism leads to compe33ve structures – Posi3ve feedback between compe33on, produc3ve efficiency, and u3litarian commitments • Compe33on can provide informa3on (Grossman and S3glitz AER 1976) • Expecta3ons ma]er
– China: Mother of girl -‐-‐ “I bear no grudge and refuse to be disappointed by society”
– Sunspots and Cycles (Azariadis and Guesnerie Restud 1986)
Model • Propor3on of popula3on making moral choice x • Degree of economic compe33on c
– temporarily perturbed by ε
• At low incomes, x’(c) > 0 – Compe33on is unfair, unfamiliar, triggering deontological commitments
• But c’(x) < 0 – Deontological commitments lead to non-‐compe33ve structures
• Growth trap (3rd world) – Compe33on leads to produc3ve efficiency
• At high incomes, x’(c) < 0 – Compe33on is fair, familiar, triggering u3litarian commitments
• And c’(x) < 0 – U3litarian commitments lead to compe33ve structures
• Mul3ple equilibria – High compe33on, high u3litarian, high growth (1st world) – Low compe33on, low u3litarian, low growth (2nd world)
Model
Methodology
• Labor Market Intermediary • Transcrip3on of Historical Texts
Example Task • Paano makasarili soever tao ay maaaring pakunwari, may mga maliwanag ilang mga prinsipyo sa kanyang kalikasan, na kung saan ang interes niya sa kapalaran ng iba, at umawit ng kanilang kaligayahan na kinakailangan para sa kanya, kahit na wala siya Nakukuha ito mula sa maliban sa kasiyahan ng makita ito. Ng mga klaseng ito ay awa o pakikiramay, ang mga damdamin na sa aming paniniwala para sa kahirapan ng iba, kapag kami ang alinman sa makita ito, o ang mga ginawa sa magbun3s ito sa isang masigla paraan.
Workers • Indian
– Accountant, Stenography, Medical transcrip3ons, Business Process Outsourcing, Consultant, Child care/Home maker, Content Writer, Unemployed, Customer Services, Office Worker, Desktop Publisher, Electrician, Freelancer, Data Entry, Student (High School, MBA), Call-‐Center, Informa3on Technology, Barber, Computer Science Lecturer, Fuel Sta3ons, Sopware Programmer, Research Analyst, Singer, Stock Broker, Teacher, Tex3le Designer, Logis3cs, Farming, Chiropracter, Journalist, Interpreter, Mechanic, Restaurant
• US – Administra3ve Assistant, Architect, Budget Analyst, Child care, Day
Trader, Editor, Engineer, Student (Law), Government employee, Medical claims processor, Manager, Musician, Navy, Photographer, Respiratory Therapist, Surveyor, Unemployed, Video editor, Web Designer, Carpenter, Call-‐Center, Nurse, Secretary, Server, Writer
Methodology
• Labor Market Intermediary • Transcrip3on of Historical Texts • 3 paragraphs lock-‐in task • 2x2x2 experimental design – Piece Rate vs. Tournament – Bystander vs. Footbridge Moral Trolley Problem – Light-‐skinned vs. Dark-‐skinned Illustra3on
Experimental Design
Payment
• You will be paid 10 cents per paragraph. • You will be randomly matched with two other people comple3ng the same task. Of the three of you, whoever submits the most accurate transcrip5on of each paragraph will receive 30 cents, and all others will receive nothing. If there is a 3e, the 30 cents will be split equally among the writers of the most accurate transcrip3ons.
Bystander (U3litarian)
• “A runaway trolley is hurtling down the tracks toward five people who will be killed if it proceeds on its present course. You can save these five people by diver5ng the trolley onto a different set of tracks, one that has only one person on it, but if you do this that person will be killed. Is it morally permissible to turn the trolley and thus prevent five deaths at the cost of one?”
Footbridge (Deontological)
• “A runaway trolley is hurtling down the tracks toward five people who will be killed if it proceeds on its present course. You are standing next to a large man on a footbridge spanning the tracks. The only way to save the five people is to push the man off the footbridge and into the path of the trolley, but if you do that, the large man will be killed. Is it morally permissible to push the man off the bridge?”
Dona3on
• Would you be willing to donate 10 cents ($0.10) of your earnings to one of the following chari3es?
• Red Cross • Red Crescent • No, I am not willing to donate
Empirical Specifica3on
• U,litarianit represents the u3litarian choice • Treatmentt represents one of the three possible stra3fica3ons
• Xi represents individual demographic characteris3cs
• 90 workers per stra3fica3on • Interact Treatmentt with other treatments or Xi
€
Utilitarianit = β1Treatmentt + β2Xit +ε it
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Compe33on-‐Bystander-‐Dark
Compe33on-‐Bystander-‐Light
Compe33on-‐Footbridge-‐Dark
Compe33on-‐Footbridge-‐Light
Piece Rate-‐Bystander-‐Dark
Piece Rate-‐Bystander-‐Light
Piece Rate-‐Footbridge-‐Dark
Piece Rate-‐Footbridge-‐Light
Percentage Making U5litarian Choice
Figure 9: The Effect of Compe55on on Deontological Commitments
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Compe33on-‐Bystander-‐Dark
Compe33on-‐Bystander-‐Light
Compe33on-‐Footbridge-‐Dark
Compe33on-‐Footbridge-‐Light
Piece Rate-‐Bystander-‐Dark
Piece Rate-‐Bystander-‐Light
Piece Rate-‐Footbridge-‐Dark
Piece Rate-‐Footbridge-‐Light
Percentage Making U5litarian Choice
Figure 9: The Effect of Compe55on on Deontological Commitments
Over 200,000 subjects: 80% make U3litarian choice in Bystander scenario, 30% make U3litarian choice in Footbridge scenario (Copp 2010, Appiah 2008, Prinz 2007, Greene, et. al. 2010)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Compe33on-‐Bystander-‐Dark
Compe33on-‐Bystander-‐Light
Compe33on-‐Footbridge-‐Dark
Compe33on-‐Footbridge-‐Light
Piece Rate-‐Bystander-‐Dark
Piece Rate-‐Bystander-‐Light
Piece Rate-‐Footbridge-‐Dark
Piece Rate-‐Footbridge-‐Light
Percentage Making U5litarian Choice
Figure 9: The Effect of Compe55on on Deontological Commitments
Responses in the bystander scenario do not respond to emo3ons (Greene, Somerville, Nystrom, Darley, Cohen 2001)
The Effect of Compe33on on U3litarian Values
• In the footbridge scenario, 47% of piece rate workers made the u3litarian choice but 13% of tournament workers made the u3litarian choice
0% 10% 20% 30% 40% 50% 60% 70% 80%
White-‐Compe33on-‐Light Illustra3on
White-‐Compe33on-‐Dark Illustra3on
White-‐Piece Rate-‐Light Illustra3on
White-‐Piece Rate-‐Dark Illustra3on
Non-‐White-‐Compe33on-‐Light Illustra3on
Non-‐White-‐Compe33on-‐Dark Illustra3on
Non-‐White-‐Piece Rate-‐Light Illustra3on
Non-‐White-‐Piece Rate-‐Dark Illustra3on
Percentage Making U5litarian Choice
Figure 10: The Effect of Compe55on on Other-‐Regarding Preferences
Non-‐Whites (47% of sample) par3cularly become more deontological towards out-‐group members (light illustra3on) with compe33on
The Effect of Compe33on on U3litarianism Towards Outgroups
White workers are 38% more likely than non-‐White workers to make the u3litarian choice when presented a dark-‐skinned illustra3on and in the piece rate se^ng, but they are 24% less likely to make the u3litarian choice when presented a dark-‐skinned illustra3on in the tournament se^ng (0.384 – 0.627)
The Effect of Compe33on on U3litarianism Towards Outgroups
• Three simultaneous hypotheses – Whether color of figures in moral trolley illustra3on primes outgroup considera3ons
– Whether individuals are more u3litarian towards outgroups
– Whether market interac3ons affect how u3litarian individuals are towards outgroups
The Effect of Compe33on on U3litarianism Towards Outgroups
– Whether color of figures in moral trolley illustra3on primes outgroup considera3ons
0% 10% 20% 30% 40% 50% 60%
White-‐Dark Illustra3on
White-‐Light Illustra3on
Non-‐White-‐Dark Illustra3on
Non-‐White-‐Light Illustra3on
Percentage Choosing to Donate
Figure 11: The Effect of Outgroup Priming on Charitable Dona5ons
The Effect of Outgroup Priming on Charitable Dona3ons
• Whites are roughly 29% less likely to donate than non-‐Whites are when presented a dark-‐skinned illustra3on of the moral trolley problem than when presented a light-‐skinned illustra3on
Consistent with Fong and Lu]mer (2009)
How Does Compe33on Affect Moral Judgment?
• Compe33on Increases Deontological Values • Compe33on Increases Deontological Values Towards Outgroups
The Effect of Compe33on on Charitable Dona3ons
Compe33on reduces overall dona3ons,
The Effect of Compe33on on Charitable Dona3ons
Compe33on reduces overall dona3ons, But increases dona3ons among tournament winners
The Effect of Compe33on on Charitable Dona3ons
Compe33on reduces overall dona3ons, But increases dona3ons among tournament winners
Do tournament winners donate more because produc3ve workers are more generous or Does compe33on cause produc3ve workers to become more generous?
0% 10% 20% 30% 40% 50% 60% 70%
Compe33on-‐Winner
Compe33on-‐Non-‐Winner
Piece Rate-‐'Placebo' Winner
Piece Rate-‐'Placebo' Non-‐Winner
Percentage Choosing to Donate
Figure 12: The Effect of Compe55on on Charitable Dona5ons
The Effect of Compe33on on Charitable Dona3ons
Compe33on reduces overall dona3ons, But increases dona3ons among tournament winners Rather than encouraging workers who are generally produc3ve to donate, compe33on specifically encourages workers who are produc3ve during tournaments to donate
The Effect of Compe33on on U3litarian Values over Economic
Development
• In the early stages of economic development, economists thought that commerce increased morality, but in the later stages of economic development, economists thought commerce decreased morality (Hirschman 1982)
The Effect of Compe33on on U3litarian Values over Economic
Development
• The effect of compe55on on u5litarianism reverses with economic development – High Income countries: Bahrain, Canada, France, Germany, Netherlands,
Switzerland, and USA – Low Income countries: Argen3na, Bahamas, Bolivia, Bulgaria, Egypt, Honduras,
India, Israel, Macedonia, Malaysia, Morocco, Philippines, Romania, Serbia, Turkey, and Zambia
The Effect of Compe33on on Produc3vity
Consistent with Gneezy, Niederle, and Rus3chini (2001), Bandiera, Barankay, and Rasul (2005)
Limita3ons • Briefness of study
– Priming to measure the causal effect of iden3ty (AER 2009) • The treatment condi3on may be conflated with confounders
– Tournament condi3on requires greater effort / ego deple3on • 3 or 6 paragraphs – makes no difference
– Tournament condi3on may suggest promo3on • Contractual silence interpreted as plain language
– Tournament condi3on may be riskier • May be part of the mechanism through which compe33on affects morality
• Global labor supply is an unusual ar3fact – Filipino data entry difficult for all
• Lock-‐in task as change in contract condi3ons – People do not quit
• Decontextualized measures of morality – Moral Trolley Problem like Implicit Associa3on Test
Summary
• Workers in the compe33ve group – more likely to make the moral decision on non-‐u3litarian grounds
– more likely to express these moral commitments to outgroup members
• Produc3ve workers in the compe33ve group – more likely to donate
Summary
• Workers in the compe33ve group – more likely to make the moral decision on non-‐u3litarian grounds
– more likely to express moral commitments to outgroup members
• Produc3ve workers in the compe33ve group – more likely to donate
• The effect of compe33on on u3litarianism reverses with economic development
Specula3ons • In developing countries
– Globaliza3on and market integra3on may make people more moral
– Small scale socie3es (Henrich, Boyd, Bowles, Camerer, Fehr, Gin3s, McElreath 2001)
• In developed countries – Compe33ve selec3on may make judges more u3litarian
• Rise of law and economics movement – Restric3ng bonuses of financiers may make them more deontological and duty-‐oriented • Consequen3alist alterna3ve to Kan3an arguments
• If u3litarianism leads to compe33ve structures – Posi3ve feedback between compe33on, produc3ve efficiency, and u3litarian commitments
0% 10% 20% 30% 40% 50% 60% 70% 80%
White-‐Compe33on-‐Light Illustra3on
White-‐Compe33on-‐Dark Illustra3on
White-‐Piece Rate-‐Light Illustra3on
White-‐Piece Rate-‐Dark Illustra3on
Non-‐White-‐Compe33on-‐Light Illustra3on
Non-‐White-‐Compe33on-‐Dark Illustra3on
Non-‐White-‐Piece Rate-‐Light Illustra3on
Non-‐White-‐Piece Rate-‐Dark Illustra3on
Percentage Making U5litarian Choice
Figure 10: The Effect of Compe55on on Other-‐Regarding Preferences
Non-‐Whites (47% of sample) par3cularly become more deontological towards out-‐group members (light illustra3on) with compe33on
