In this article, I critically respond to Herbert Gintis's criticisms of the behavioral-economic foundations of Ken Binmore 's game-theoretic theory of justice. Gintis, I argue, fails to take full account of the normative requirements Binmore sets for his account, and also ignores what I call the ‘scale-relativity’ considerations built into Binmore 's approach to modeling human evolution. Paul Seabright's criticism of Binmore, I note, repeats these oversights. In the course of answering Gintis's and Seabright's objections, I clarify and (...) extend Binmore 's theory in a number of respects, integrating it with Kim Sterelny's and Don Ross's recent work on the evolution of people as cultural entities. The account also yields a novel basis for choosing between socialism and what Binmore calls ‘whiggery’ as normative political programs. Key Words: theory of justice • bargaining theory • evolutionary game theory • human evolution • Ken Binmore • Herbert Gintis • Kim Sterelny. (shrink)

Different applications of synthetic biology are alike in that their possible negative consequences are highly uncertain, potentially catastrophic, and perhaps irreversible; therefore, they are also alike in that public attitudes about them are fertile ground for behavioral economic phenomena. Findings from behavioral economics suggest that people may not respond to such applications according to the normal rules of economic evaluation, by which the value of an outcome is multiplied by the mathematical probability that the outcome will occur. (...) Possibly, then, synthetic biology applications challenge the normative postulates of the standard approach, too.I want to first consider how some of the phenomena described by behavioral economists—and behavioral scientists more broadly—might affect people's perceptions of the uncertainties associated with synthetic biology. My analysis will be far from complete, however, because behavioral economics is essentially the study of human behavior, and thus its reach is potentially vast and its development longstanding and ongoing. Nonetheless, I hope to give an indicative perspective on how some aspects of behavioral economics might affect the assessment and perceived acceptability of synthetic biology. I will then consider the issue of agency. Should policy‐makers respect people's reactions to synthetic biology when those reactions are known to be driven by behavioral economic phenomena rather than following the normative postulates of rational choice theory? Or should policy‐makers dismiss these reactions as inherently biased? I will argue that the normative force of these human reactions (probably) depends on phenomenon and context. (shrink)

Stakeholder theorists distinguish between normative stakeholders, those who gain moral standing by making contributions to the firm, and derivative stakeholders, those who can constrain the corporate association even though they make no contribution. The board of directors has the legal authority to distinguish among these stakeholder groups and to distribute rights and obligations among these stakeholder groups. To be sure, this stakeholder formulation appropriately seizes on the firm’s voluntary, associative character. Yet, the firm’s constituents contribute assets and incur risks (...) to participate in market, economic activities. And, as such, the firm’s “stakeholders” must share an imperfect language to assist in making two key economic decisions: (1) who are the legitimate and who are the derivative stakeholders; and (2) who should sit on the board? Still, stakeholder theorists have good reason to be skeptical of neoclassical economics. Its assumptions that all act opportunistically and that all can calculate rationally and fully hardly correspond to studies on the managerial experience of corporate coordination. However, advances in behavioral law and economics now provide a cogent economic logic that readily fits into a stakeholder mode. In brief, we argue that (1) the firm’s economic purpose designates legitimacy to core stakeholders, to those who add value, assume unique risk, and can incur harm; (2) the board serves as the principal who coordinates these core stakeholders to sustain competitive advantage and new wealth creation; and (3) state incorporation law, Delaware in particular, reinforces the board’s function. These, in turn, supply selection criteria for board membership. We aim to synchronize concepts from behavioral law and economics with stakeholder theory. (shrink)

The article aims to demonstrate that the nudge theory suffers from three main weaknesses stemming from its theoretical dependence on behavioural economics. The first two weaknesses endanger the paternalistic goal, whereas the third does not justify the libertarian attribute. The first weakness lies in the incomplete realistic characterisation of behavioural economics theory that is the central theoretical pillar of Nudge theory. The second weakness is even more relevant. The normative model of behavioural economics is neoclassical rationality. (...) It can be applied to choices in conditions of risk, when it is possible to forecast the probability of the outcomes of one’s choices. On the contrary the real life problems are inside a complex and uncertain environment. In an uncertain environment the neoclassical algorithms are no longer valid, in that they postulate the knowledge of the probability of the outputs. Thus errors and bias, as observed in behavioural economics, are not such in many instances, but they are instead adaptive and therefore rational responses to the context of decision-making. Therefore nudge theory that pursues the normative paternalistic objective of neutralising the bias and judgement errors discovered by behavioural economics and putting paternalistically the citizen on the right track, is in fact proceeding in the wrong direction. The last weakness concerns an assumption of Nudge theory about the duality of mind. System 1 represents the intuitive mind, while System 2 corresponds to the analytical one. System 1 tends to make decisions quickly and unconsciously, while System 2 follows a slow and conscious process. Biases and judgement errors are mainly generated by System 1. However, System 2 may later intervene to correct them. From this premise, the Nudge theory affirms its libertarian character. In this paper I will argue that the dualism of the mind would not entail the reversibility of some nudges, particularly of default states. In this way the fundamental pillar is weakened to justify the libertarian character of the nudge theory. (shrink)

Corruption involves greed, money, and risky decision-making. We explore the love of money, pay satisfaction, probability of risk, and dishonesty across cultures. Avaricious monetary aspiration breeds unethicality. Prospect theory frames decisions in the gains-losses domain and high-low probability. Pay dissatisfaction (in the losses domain) incites dishonesty in the name of justice at the individual level. The Corruption Perceptions Index, CPI, signals a high-low probability of getting caught for dishonesty at the country level. We theorize that decision-makers adopt avaricious love-of-money aspiration (...) as a lens and frame dishonesty in the gains-losses domain (pay satisfaction-dissatisfaction, Level 1) and high-low probability (CPI, Level 2) to maximize expected utility and ultimate serenity. We challenge the myth: Pay satisfaction mitigates dishonesty across nations consistently. Based on 6500 managers in 32 countries, our cross-level three-dimensional visualization offers the following discoveries. Under high aspiration conditions, pay dissatisfaction excites the highest- (third-highest) avaricious justice-seeking dishonesty in high (medium) CPI nations, supporting the certainty effect. However, pay satisfaction provokes the second-highest avaricious opportunity-seizing dishonesty in low CPI entities, sustaining the possibility effect—maximizing expected utility. Under low aspiration conditions, high pay satisfaction consistently leads to low dishonesty, demonstrating risk aversion—achieving ultimate serenity. We expand prospect theory from a micro and individual-level theory to a cross-level theory of monetary wisdom across 32 nations. We enhance the S-shaped Curve to three 3-D corruption surfaces across three levels of the global economic pyramid, providing novel insights into behavioral economics, business ethics, the environment, and responsibility. (shrink)

Behavioral economics is the latest trendy form of economics. Increasingly theorists are advocating using behavioral economics to do normative ethics or claiming that the behavioralists’ findings render normative claims otiose. I argue in this paper that we should be extremely wary when it comes to accepting any such normative pronouncements. I argue that behavioral economics: (a) minimizes and/or misunderstands the role that character and architectonic life goals play in accounting for (...) the why of ethical behavior, (b) fundamentally misconceives human practical rationality, (c) often unduly narrows the range of human action and choice, (d) misleadingly assumes that options are merely given to us rather than generated by us in accordance with our character, (e) is parasitic upon normative ethics, (f) results in an unhelpful ad hoc approach to ethical thinking, which is unlikely to prove all that useful and may even dangerously mislead ordinary agents or those who operate corporate compliance programs and who seek to improve corporate cultures, and (g) ignores the key role played in ethical behavior by meso‐ and macro‐factors. (shrink)

Monetary intelligence theory asserts that individuals apply their money attitude to frame critical concerns in the context and strategically select certain options to achieve financial goals and ultimate happiness. This study explores the dark side of monetary Intelligence and behavioral economics—dishonesty. Dishonesty, a risky prospect, involves cost–benefit analysis of self-interest. We frame good or bad barrels in the environmental context as a proxy of high or low probability of getting caught for dishonesty, respectively. We theorize: The magnitude and (...) intensity of the relationship between love of money and dishonest prospect may reveal how individuals frame dishonesty in the context of two levels of subjective norm—perceived corporate ethical values at the micro-level and Corruption Perceptions Index at the macro-level, collected from multiple sources. Based on 6382 managers in 31 geopolitical entities across six continents, our cross-level three-way interaction effect illustrates: As expected, managers in good barrels, mixed barrels, and bad barrels display low, medium, and high magnitude of dishonesty, respectively. With high CEV, the intensity is the same across cultures. With low CEV, the intensity of dishonesty is the highest in high CPI entities —the Enron Effect, but the lowest in low CPI entities. CPI has a strong impact on the magnitude of dishonesty, whereas CEV has a strong impact on the intensity of dishonesty. We demonstrate dishonesty in light of monetary values and two frames of social norm, revealing critical implications to the field of behavioral economics and business ethics. (shrink)

ABSTRACTBehavioral economics may be considered as neoclassical behavioral economics, which adopts a neoclassical normative model of rationality and explains bias a...

This article assesses two major conceptual arguments against theories of choice.The first argument concerns the circularity of belief-desire psychology, on which decision theory is based. The second argument concerns the normativity arising from the concept of rationality. Each argument is evaluated against experimental practice in economics and psychology, and it is concluded that both arguments fail to establish their skeptical conclusion that there can be no science of intentional human actions.

This chapter discusses the role of methodological individualism in behavioral economics. Since behavioral economics developed in reaction to traditional microeconomics, the chapter sketches first the latter’s understanding of methodological individualism. It argues that traditional microeconomics is based on three principles: the self-interest principle, the rationality principle, and the social change principle. The chapter then discusses experimental findings that led behavioral economists to relax all three principles. It argues that, in particular, the relaxation of the social (...) change principle pushes the boundaries of methodological individualism as understood in traditional microeconomics since it highlights ways in which social institutions, norms, and rules affect individual processes of preference formation. In doing so, behavioral economics invites intricate methodological discussions of the bidirectional relationship between social institutions and individual actions. (shrink)

In "Behavioral Law and Economics: The Assault on Consent, Will, and Dignity," Mark D. White uses the moral philosophy of Immanuel Kant to examine the intersection of economics, psychology, and law known as "behavioral law and economics." Scholars in this relatively new field claim that, because of various cognitive biases and failures, people often make choices that are not in their own interests. The policy implications of this are that public and private organizations, such as (...) the state and employers, can and should design the presentation of options and default choices in order to "steer" people to the decision they would make, were they able to make choices in the absence of their cognitive biases and failures. Such policies are promoted under the name "libertarian paternalism," because choice is not blocked or co-opted, but simply "nudged." White argues that such manipulation of choice is impossible to conduct in people's true interests, and any other goal pursed by policymakers substitutes their own ends, however benevolent they may be, for people's true ends. Normatively, such manipulation should not be conducted because it fails to respect the dignity and autonomy of persons, what some hold to be the central idea in Kant's ethical system, and which serves to protect the individual from coercion, however subtle, from other persons or the state. (shrink)

We advance the thesis that the method of experimental economics can make significant contributions to normative, as opposed to descriptive, business ethics. We contend that there are two basic ways in which experimental economics may make this contribution, and we exemplify these ways by pointing to experimental support of social contract theory as rational foundation for business ethics. These two ways are: (1) adding psychological realism; and (2) testing some quasi-empirical assumptions present in normative theory. In (...) order to make good our methodological claim, we first describe the methodological rules of experimental economics, distinguishing this method from other behavioral business ethics approaches. We also contemplate the possible objection that empirical methods cannot bear on normative ethics because there is no way of bridging the gap between descriptive theory (how people behave) and normative theory (how people ought to behave). (shrink)

Given the endowment effect, the role of attention in decision-making, and the framing effect, most behavioral economists agree that it would be a mistake to accept the satisfaction of revealed preferences as the normative criterion of choice. Some have suggested that what makes agents better off is not the satisfaction of revealed preferences, but ‘true’ preferences, which may not always be observed through choice. While such preferences may appear to be an improvement over revealed preferences, some philosophers of (...) economics have argued that they face insurmountable epistemological, normative, and methodological challenges. This article introduces a new kind of true preference – values-based preferences – that blunts these challenges. Agents express values-based preferences when they choose in a manner that is compatible with a consumption plan grounded in a value commitment that is normative, affective, and stable for the agent who has one. Agents who choose according to their plans are resolute choosers. My claim is that while values-based preferences do not apply to every choice situation, this kind of preference provides a rigorous way for thinking about classic choice situations that have long interested behavioral economists and philosophers of economics, such as ‘Joe-in-the-cafeteria.’. (shrink)

Nudging and sludging are forms of choice architecture that shape behavior. While it is generally believed that nudging should improve well-being and sludging should decrease it, there has been debate about how to distinguish between the two. Some have suggested that the difference lies in the ease with which behaviors are facilitated or hindered, but this criterion does not consider the normative distinction (nudges have a positive connotation and sludges a negative one) or the impact on well-being. This paper (...) proposes a normative approach to defining nudging and sludging that takes into account both well-being and the principle of autonomy. According to our proposal, the concept of nudging should involve interventions that aim to increase well-being while respecting individuals’ freedom of choice, while sludging involves interventions that decrease well-being while also respecting autonomy, whether intentionally or unintentionally. (shrink)

In The Community of Advantage, Robert Sugden advocates an opportunity-oriented framework for normative analysis, positions it a substitute for behavioral welfare economics, and criticizes the latte...

“Decisions from experience” (DFE) refers to a body of work that emerged in research on behavioral decision making over the last decade. One of the major experimental paradigms employed to study experienced-based choice is the “sampling paradigm”, which serves as a model of decision making under limited knowledge about the statistical structure of the world. In this paradigm respondents are presented with two payoff distributions, which, in contrast to standard approaches in behavioral economics, are specified not in (...) terms of explicit outcome-probability information, but by the opportunity to sample outcomes from each distribution without economic consequences. Participants are encouraged to explore the distributions until they feel confident enough to decide from which they would prefer to draw from in a final trial involving real monetary payoffs. One commonly employed measure to characterize the behavior of participants in the sampling paradigm is the sample size, that is, the number of outcome draws which participants choose to obtain from each distribution prior to terminating sampling. A natural question that arises in this context concerns the “optimal” sample size, which could be used as a normative benchmark to evaluate human sampling behavior in DFE. In this theoretical manuscript, we relate the DFE sampling paradigm to the classical statistical decision theoretic literature and, under a probabilistic inference assumption, evaluate optimal sample sizes for decisions from experience. In our treatment we go beyond analytically established results by showing how the classical statistical decision theoretic framework can be used to derive optimal sample sizes under arbitrary, but numerically evaluable, constraints. Finally, we critically evaluate the value of deriving optimal sample sizes under this framework as testable predictions for the experimental study of sampling behavior in DFE. (shrink)

This contribution reviews the main normative and positive arguments that can used in the assessment of the costs and benefits of food marketing restrictions, focusing specifically on theoretical and empirical developments in the economics of advertising, consumer behaviour and industrial organization since the 70s.

In the study of women in academia, the focus is often particularly on women’s stark underrepresentation in the math-intensive fields of natural sciences, technology, and economics. In the non-math-intensive of fields life, social and behavioral sciences, gender issues are seemingly less at stake because, on average, women are well-represented. However, in the current study, we demonstrate that equal gender representation in LSB disciplines does not guarantee women’s equal opportunity to advance to full professorship—to the contrary. With a cross-sectional (...) survey among N = 2,109 academics at mid-level careers in the Netherlands, we test the hypothesis that in LSB, female academics perceive to hit a “thicker” glass ceiling—that is, they see a sharper contrast between the high representation of women at the lower compared to the top levels. We test whether this predicts female academics’ lower estimated chances to reach full professorship relative to men in LSB. We introduce a novel perceived glass ceiling index, calculated based on academics’ perceptions of the share of women and men in their direct work environment minus their perceptions of gender ratio among full professors in their field. Results confirm that the perceived glass ceiling is thicker in the non-math-intensive LSB compared to math-intensive NTE fields. Furthermore, only in LSB, women perceived a thicker glass ceiling than men. Moreover, only among female academics, the thicker the perceived glass ceiling, the lower their estimated chances to become full professor 1 day. Combined, a moderated mediation showed that for women only, a thicker perceived glass ceiling in LSB compared to NTE disciplines predicted their lower estimated chances to advance to full professor level. No such mediation occurred for men. We conclude that women’s higher numerical representation in LSB disciplines does not negate a male-dominant normative standard about academic leadership and success. Paradoxically, the perceived odds for female academics to reach the top of their field are lower in fields where they are relatively highly represented, and this may pose unique barriers to women’s perceived opportunities for career success. (shrink)

Behavioral economics has rejuvenated economic theory and deepened the bonds between economic theory and the other social sciences. Neoclassical economics does not depend on individual preferences being self-regarding. Moreover, in market contexts, laboratory experiments indicate that traditional theory works well. Behavioral economic findings thus enrich and expand neoclassical economics rather than undermining it. In particular, social norms are an emergent property of human sociality, and exist as macrosocial structures that are not reducible to the preferences (...) of individuals. Behavioral economists are not theorists, but rather experimentalists. With few exceptions, they do not provide, nor aim to provide, cogent models for the phenomena they discover. Far from downplaying “inconvenient facts,” as is the practice of traditional economic theory, behavioral economists relish finding novel forms of individual decision-making and strategic behavior. (shrink)

The purpose of this paper is to examine the normative interpretation of the fast-and-frugal research program and in particular to contrast it with the normative reading of rational choice theory and behavioral economics. The ecological rationality of fast-and-frugal heuristics is admittedly a form of normative naturalism – it derives what agents “ought” to do from that which “is” ecologically rational – and the paper will examine how this differs from the normative rationality associated with (...) rational choice theory. I will also attempt to assess the relative adequacy of normative ecological rationality. (shrink)

This study aims at identifying the tools necessary for COVID-19 health emergency management, with particular reference to the period following the first lockdown, a crucial phase in which it was important to favor the maintenance of protective behaviors. It also aims at identifying the messages and sources that were most effective in managing communication correctly in such a crucial phase that is likely characterized by a fall in perceived health risk (due to the flattening of the epidemic curve) and a (...) simultaneous rise in perceived economic and social risks (due to the enduring calamity). Knowing what source will be most effective to convey a specific message is fundamental in enabling individuals to focus on and comply with the rules. At the same time, it is necessary to understand how the message should be presented, and the relationships between messages, sources and targets. To meet these goals, data were collected through a self-administered online questionnaire submitted to a sample of undergraduate students from a University in Lombardy–the region most affected by the pandemic in the first wave- (Study 1), and to a national sample composed of Italian citizens (Study 2). Through our first manipulation which explored the effectiveness of social norms in relation to different sources, we found that, in the national sample, the injunctive norm conveyed by the government was the most effective in promoting behavioral intentions. By contrast, among the students, results showed that for the critical group with a lower risk perception (less inclined to adopt prevention behavior) descriptive norms, which implicitly convey the risk perception of peers, were as effective as the government injunctive norm. Our second manipulation, identical in Study 1 and 2, compared four types of communication (emotional, exponential growth, both of them, or neutral). The neutral condition was the most memorable, but no condition was more effective than the others. Across all message types there was a high intention to adopt protective behaviors. The results indicate possible applicative implications of the adopted communicative tools. (shrink)

The present essay addresses the conceptual structure of customary law, understood as a set of customary rules. More specifically, it deals with the core question of what opinio juris entails as a constituent element of customary law. The work will begin with an analysis of samples of common strategies in contemporary legal theory that deal with opinio juris when analyzing the structure of customary law. Subsequently, following Hart’s notion about what constitutes social rules, and introducing explanatory features from Game Theory (...) applied to social philosophy and some insights from Behavioral Economics, the goal of the present study is to propose a different conceptual path for analyzing and identifying customary law with what could be understood as “opinio juris”, given the conceptual necessity of finding the normative element that lies within the usus, or social practices. (shrink)

This book contains perspectives of world-renowned scholars from the fields of law, economics, and political science about the relationship between law and norms. The authors take different approaches by using a wide variety of perspectives from law, legal history, neoclassical economics, new institutional economics, game theory, political science, cognitive science, and philosophy. The essays examine the relationship between norms and the law in four different contexts. Part One consists of essays that use the perspectives of cognitive science (...) and behavioral economics to analyze norms that influence the law. In Part Two, the authors use three different types of common property to examine cooperative norms. Part Three contains essays that deal with the constraints imposed by norms on the judiciary. Finally, Part Four examines the influence formal law has on norms. (shrink)

Economics bases the choice theory on the mental experiment that introduces the choice correspondence, which associates to every set of possible actions the subset of preferred actions. If some conditions are satisfied, then the choice correspondence implies a binary preference ordering on actions and an ordinal utility function. This approach applies both to decisions under certainty and decisions under uncertainty. The preference ordering depends on the consequence of actions. Under certainty, there is only one consequence to every action, while, (...) under uncertainty, many consequences are possible, associated with the states of the world. These consequences are represented by the action itself, the states of the world, and the corresponding outcomes. Current theories consider only outcomes, but some theories include state dependent preference. Preference for the action itself is not considered, but it might be relevant. The rationality of the theory is a different question from the rationality of the decision-maker. Moreover, the rationality of the theory may imply the rationality of a preference ordering, but this does not require the rationality of the decision-maker. It is only assumed that he/she behaves according to the calculation made by the theorist. The rationality of the preference ordering requires the rationality of the preference on outcomes, of the expectations on the events, and of their connection with the preference ordering on actions. The normative relevance of rational preferences is removed by the introduction of many alternative rational theories, which justify contrasting behaviors in identical situations. (shrink)

In recent years, misinformation sharing has become the focus of public debate and academic research. We aim to explore whether individuals prefer to share accurate information or not, and discover what factors increase people’s preferences for sharing accurate information. Combining behavioral economics experiments and psychology experiments, we construct “an information search—information sharing—information feedback experiment” to examine individuals’ behavior of sharing accurate information and its influencing factors. A total of 210 students are recruited for the laboratory experiment. Our results (...) show that when individuals can control the accuracy of the information they obtain through their efforts, they are more willing to share accurate information with others. We also find that positive feedback from information receivers can promote the accuracy of information shared by individuals, and this effect works through reciprocity norms. Individuals with higher reciprocity are more willing to share accurate information, especially in the treatment with the role of reciprocity norms enhanced by feedback. These findings indicate that individuals who are willing to obtain accurate information prefer to share information, and information feedback can enhance this preference through reciprocity norms. This study captures individuals’ behavior and preference characteristics with regard to the accuracy of the information they share in the era of highly developed network interaction. (shrink)

This article addresses major arguments in the controversy about the “rationality” of moral behavior: can moral behavior be explained by rational choice theory (RCT)? The two positions discussed are the incentives thesis (norms are incentives as any other costs and benefits) and the autonomy thesis claiming that moral behavior has nothing to do with utility. The article analyses arguments for the autonomy thesis by J. Elster, A. Etzioni, and J. G. March and J. P. Olsen. Finally, the general claim is (...) discussed whether norm following and norm emergence are utility maximizing. The conclusion is that the autonomy thesis is not tenable if one applies a wide subjectivist, social psychological version of RCT that includes the assumption of “bounded rationality.” The autonomy thesis is only compatible with a narrow version of RCT that excludes internal outcomes and that refers to norms that do not have external outcomes. It is argued that such a narrow version is not capable of explaining many forms of behavior social scientists are interested in. (shrink)

Since the concept of “nudge” was introduced in 2008 by Thaler and Sunstein, proposing that small interventions based on changes in choice architectures can alter people’s behavior and make it easier for them to achieve their desired goals, the application in public policy of behavioral economics has gained significant attention. This has led to the emergence of different types of policies based on behavioral insights, which have been used in a variety of areas, including health or finance, (...) with the goal of promoting well-being and addressing social and economic issues. After providing a basic theoretical background as a frame of reference to understand gender violence, this study explores the use of tools from the field of behavioral economics as it is applied in public policy. Regulatory (paternalistic) and non-regulatory (libertarian) interventions based on behavioral insights will be considered: nudges, boosts, shoves, budges, or sludge audits, are examined as potential interventions to use in matters related to this type of violence. After evaluating these behavioral policy instruments and their potential effectiveness, the limitations of the behavioral perspective are recognized, and the need for a multifaceted approach to combating gender violence is acknowledged. The article concludes by arguing that public policies addressing gender violence should not only utilize behavioral tools but should also incorporate strategies related to education, legislation, and social norms. (shrink)

Some behavioral economists argue that the honoring of social norms can be adequately modeled as the optimization of social utility functions in which the welfare of others appears as an explicit argument. This paper suggests that the large experimental claims made for social utility functions are premature at best, and that social norms are better studied as equilibrium selection devices that evolved for use in games that are seldom studied in economics laboratories.

Modern economics deploys the concept of time-value as if it were a descriptive, empirically-verifiable objective property of the sort studied by natural science in its investigation of the natural world. In particular, economics frames efficiency as a core feature of time-value understood in a purportedly descriptive sense. Economic time-value is stripped of its normative quality, and held up for scientific investigation and brute factual description of the sort associated with criterial and natural-kind concepts. As such, economics (...) deploys the conceptual devices such as the “time-value of money” in its quest to objectively ascertain in a purportedly morally-neutral fashion behaviors that are favorable to capital efficiency maximization. Yet, as the paper shows, economics thus removes the relation of efficiency to time-value from the realm of normative choice – that is, from the realm of contested interpretive concepts. (shrink)

Social norms of responsibility are shared beliefs on what constitutes responsible behavior, and they play a significant role in determining CSR. This study analyzes how social norms of responsibility permeate corporate boundaries and influence CSR through political leaders, corporate executives, employees, and the public. Socially irresponsible behaviors of the above populations are used as proxies for local social responsibility norms and related to CSR ratings for firms headquartered in the twenty largest U.S. metro areas. The empirical results show that firms (...) headquartered in cities with more responsible social norms exhibit higher ESG scores even after controlling for various demographic, regional, and economic factors. Social responsibility norms encourage firms to be more responsible but are ineffective in deterring irresponsible corporate behaviors. Corporate and political leaders are the essential channels through which social norms of responsibility influence CSR, highlighting the importance of instituting regulations and setting high ethical standards for political and business leaders. This study also demonstrates that social norms have a significant impact on firms with leaders who are more susceptible to local social norms (i.e., local leaders) than non-local leaders. In addition, this study documents a negative bias for responsible social norms in that they condemn irresponsible behaviors more than reward responsible ones. Collectively, the above findings underline the importance of social norms of responsibility in shaping CSR and provide additional insights into societal motivations for CSR. (shrink)

In a series of important papers published roughly twenty years ago, Professor Robert Cooter developed a comprehensive economic theory of moral norms. He explained the value of those norms, described the process by which norms are adopted, and offered a set of predictions regarding the circumstances under which an individual will choose to adopt a particular moral norm. This brief Article applies behavioral law and economics and hedonic psychology to expand upon Professor Cooter’s path-breaking theory. In particular, understanding (...) welfare in hedonic terms — rather than preference-satisfaction terms — suggests a multitude of further situations in which individuals will justifiably seek to internalize moral norms. The hedonic approach to welfare then further suggests an enhanced role for the government to play in encouraging the adoption of welfare-enhancing norms. Cooter’s theory, combined with modern understandings of welfare and human behavior, thus offers powerful predictive and prescriptive possibilities. (shrink)

Economic models of addiction are choice-based. These models push the choice paradigm too far by modeling addiction as rational, normative behavior. Heyman's target article provides a sensible alternative to this economic approach by emphasizing that addiction is characterized by ambivalence and a perceived loss of self control. However, matching may not be a satisfactory platform on which to build this alternative model. Matching experiments do not provide evidence of ambivalence or perceived loss of self control.

Most recent developments in the study of social dilemmas give an increasing amount of attention to cognition, belief systems, valuations, and language. However, developments in this field operate almost entirely under epistemological assumptions which only recognize the instrumental form of rationality and deny that “value judgments” or “moral questions” have cognitive content. This standpoint erodes the moral aspect of the choice situation and obstructs acknowledgment of the links connecting cognition, inner growth, and moral reasoning, and the significance of such links (...) in reaching cooperative solutions to many social dilemmas. Concurrently, this standpoint places the role of communication and mutual understanding in promoting cooperation in morally relevant conflicts of action in a rather mysterious situation. This paper draws on Habermas’s critique of instrumental action, and on the most recent developments in institutional and behavioral economics with a view to enhancing our knowledge of the interventions used to cope with social dilemmas. We conclude the paper with a brief presentation of a research strategy for examining the capacity of alternative developmental models to predict dissimilar choices under similar incentive conditions in social dilemmas. (shrink)

:Recent behavioral economics studies have shown that third parties compensate players in Dictator, Ultimatum, and Trust games. However, there are almost no studies about what drives third parties to compensate victims in such games. It can be argued that compensation is a form of helping; and helping behavior, in a variety of forms, has been widely researched, especially with regard to motivators. Previous work on helping behavior has focused on empathic concern as a primary driver. In sharp contrast, (...) anger is often seen as an antisocial motivator resulting in aggression. However, other research has shown that moral outrage, anger evoked by the violation of a moral rule or a social norm, can lead to the punishment of a perpetrator, often described as altruistic or pro-social punishment. Some of the motivations for pro-social punishment, namely a concern for justice or the restoration of community values, can also be realized through victim compensation. We therefore propose the hypothesis that moral outrage leads to compensating behavior above and beyond what is predicted by empathic concern, but only when a social norm has been violated. We test this hypothesis in two studies, both of which use modified trust games in which the investor experiences a loss due either to a social norm violation or some other cause. Study 1 shows that trait moral outrage predicts third-party compensatory behavior above and beyond empathic concern, but only when a social norm is violated. To better understand the causal mechanism, Study 2 directly manipulated moral outrage, showing again that moral outrage leads to compensation, but only when a social norm is violated. View HTML Send article to KindleTo send this article to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle. Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply. Find out more about the Kindle Personal Document Service.I’M SO ANGRY I COULD HELP YOU: MORAL OUTRAGE AS A DRIVER OF VICTIM COMPENSATIONVolume 32, Issue 2Erik W. Thulin and Cristina Bicchieri DOI: https://doi.org/10.1017/S0265052516000145Your Kindle email address Please provide your Kindle [email protected]@kindle.com Available formats PDF Please select a format to send. By using this service, you agree that you will only keep articles for personal use, and will not openly distribute them via Dropbox, Google Drive or other file sharing services. Please confirm that you accept the terms of use. Cancel Send ×Send article to Dropbox To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Dropbox. I’M SO ANGRY I COULD HELP YOU: MORAL OUTRAGE AS A DRIVER OF VICTIM COMPENSATIONVolume 32, Issue 2Erik W. Thulin and Cristina Bicchieri DOI: https://doi.org/10.1017/S0265052516000145Available formats PDF Please select a format to send. By using this service, you agree that you will only keep articles for personal use, and will not openly distribute them via Dropbox, Google Drive or other file sharing services. Please confirm that you accept the terms of use. Cancel Send ×Send article to Google Drive To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive. I’M SO ANGRY I COULD HELP YOU: MORAL OUTRAGE AS A DRIVER OF VICTIM COMPENSATIONVolume 32, Issue 2Erik W. Thulin and Cristina Bicchieri DOI: https://doi.org/10.1017/S0265052516000145Available formats PDF Please select a format to send. By using this service, you agree that you will only keep articles for personal use, and will not openly distribute them via Dropbox, Google Drive or other file sharing services. Please confirm that you accept the terms of use. Cancel Send ×Export citation Request permission. (shrink)

The study of social norms sprawls across all of the social sciences but the the concept lacks a unified conception and formal theory. We synthesize an account that can be applied generally, at the social scale of analysis, and can be applied to empirical evidence generated in field and lab experiments. More specifically, we provide new analysis on representing norms for application in empirical political science, and in parts of economics that do not follow the recent trend among some (...) behavioral economists to build models of the cognitive and motivational states of individuals taken “one at a time”. Foundational sources for our project are Bicchieri (2006, 2017), Kuran (1995), and Stirling (2012, 2016). From Bicchieri take that a norm exists in a social structure when a significant networked subset of individuals share descriptive and injunctive expectations that it regulates their interactions. From Kuran we take the insight that prevailing norms may come to be widely disliked by participants in networks but survive because norm suppress public displays of disenchantment. From Stirling we apply conditional game theory (CGT) to provide the technical resources for building our model of a norm-regulated social interaction. The example we use is a multi-player Investment/Trust Game. (shrink)

This paper studies the controversy on Fehr and Schmidt's model of inequity aversion. It borrows insights from disciplines such as philosophy and the sociology of science that have specialized in studying scientific controversies. Our goal is to contribute to the historical and methodological literature on behavioral economics, which happens to have neglected behavioral economists' research on social preferences. Our analysis of the controversy reveals some new insights about the relation of behavioral economics with other sub-fields (...) in economics, as well as with other disciplines. (shrink)

The target article by Henrich et al. describes some economic experiments carried out in fifteen small-scale societies. The results are broadly supportive of an approach to understanding social norms that is commonplace among game theorists. It is therefore perverse that the rhetorical part of the paper should be devoted largely to claiming that “economic man” is an experimental failure that needs to be replaced by an alternative paradigm. This brief commentary contests the paper's caricature of economic theory, and offers a (...) small sample of the enormous volume of experimental data that would need to be overturned before “economic man” could be junked. (shrink)

Every day, in professional work and in our personal lives, we reproduce by words and behaviors particular understandings of life and how it works. This includes understandings about what is ‘normal’ and ‘not normal’ masculinity and who are ‘normal’ and ‘not normal’ boys and men. Being marginalized or outcast from the norm is rarely a free choice. The language that constructs normal and abnormal is not innocent and does not simply arrive in our minds transparently reflected in our behavior or (...) in our client advice or student education. Examining words and behaviors from adolescent boys and from media sources, this research explores the role of cultural discourses in producing normative and marginalized masculinities. It builds upon recent scholarship that questions cultural prescriptions for masculinity and traditional male norms. Feminist, poststructural, psychoanalytic discourse analysis and multiple methods were used to explore links between cultural discourses of masculinity and performativity of masculinity. Practices of heterosexuality, homophobia, athleticism, economic privilege, toughness, and violence provided pathways toward achieving and/or maintaining status as the hegemonic masculine norm in adolescence. ‘Popularity’ signified the norm and ‘outcasts’ from the norm signified marginalized masculinities. (shrink)

Within paleoanthropology, the origin of behavioral modernity is a famous problem. Very large-brained hominins have lived for around half a million years, yet social lives resembling those known from the ethnographic record appeared perhaps 100,000 years ago. Why did it take 400,000 years for humans to start acting like humans? In this article, I argue that part of the solution is a transition in the economic foundations of cooperation from a relatively undemanding form, to one that imposed much more (...) stress on human motivational and cognitive mechanisms. The rich normative, ceremonial, and ideological lives of humans are a response to this economic revolution in forager lives; from one depending on immediate return mutualism to one depending on delayed and third-party reciprocation. (shrink)

Behavioral paternalism raises deep concerns that do not arise in traditional welfare economics. These concerns stem from behavioral paternalism’s acceptance of the defining axioms of neoclassical rationality for normative purposes, despite having rejected them as positive descriptions of reality. We argue that behavioral paternalists have indeed accepted neoclassical rationality axioms as a welfare standard; that economists historically adopted these axioms not for their normative plausibility, but for their usefulness in formal and theoretical modeling; that (...) broadly rational individuals might fail to satisfy the axioms for various reasons, making them unpersuasive as normative criteria; and that even if their violation did constitute irrationality, that would not justify paternalists’ choosing among inconsistent preferences to define an individual’s “true” preferences. (shrink)

We conducted an online study of projected behavioral and emotional responses to escalating terrorist threat. The study employed scenarios in which terrorists targeted commercial airliners with missiles at an international airport. An important feature of attacks on commercial flights is that unlike many other terrorist threats, exposure to the risk can be controlled simply be refusing to fly. Nine scenarios were constructed by crossing two between-subjects factors, each with three levels: (1) planned government protective actions and (2) social norm, (...) expressed as variation in airline ticket sales. Scenarios also incorporated descriptions of three increasingly severe attacks; this was a within-subjects factor. After each description, we asked respondents to imagine they had planned a vacation to a destination 2,500 km away, and we examined their projected fear and behavior. Fear increased and more trips were canceled as the attacks escalated. Government protective actions and social norm had little impact on either fear or planned flying. (shrink)

The past thirty years have seen a surge of empirical research into political decision making and the influence of framing effects — the phenomenon that occurs when different but equivalent presentations of a decision problem elicit different judgments or preferences. During the same period, political philosophers have become increasingly interested in democratic theory, particularly in deliberative theories of democracy. Unfortunately, the empirical and philosophical studies of democracy have largely proceeded in isolation from each other. As a result, philosophical treatments of (...) democracy have overlooked recent developments in psychology, while the empirical study of framing effects has ignored much contemporary work in political philosophy. In Framing Democracy, Jamie Terence Kelly bridges this divide by explaining the relevance of framing effects for normative theories of democracy. -/- Employing a behavioral approach, Kelly argues for rejecting the rational actor model of decision making and replacing it with an understanding of choice imported from psychology and social science. After surveying the wide array of theories that go under the name of democratic theory, he argues that a behavioral approach enables a focus on three important concerns: moral reasons for endorsing democracy, feasibility considerations governing particular theories, and implications for institutional design. Finally, Kelly assesses a number of methods for addressing framing effects, including proposals to increase the amount of political speech, mechanisms designed to insulate democratic outcomes from flawed decision making, and programs of public education. -/- The first book to develop a behavioral theory of democracy, Framing Democracy has important insights for democratic theory, the social scientific understanding of political decision making, economics, and legal theory. (shrink)

Much behavioral welfare economics assumes that expected utility theory does not accurately describe most human choice under risk. A substantial literature instead evaluates welfare consequences by taking cumulative prospect theory as the natural default alternative, at least where description is concerned. We present evidence, based on a review of previous literature and new experimental data, that the most empirically adequate hypothesis about human choice under risk is that it is heterogeneous, and that where EUT does not apply, more (...) choice is characterized by rank-dependent utility models than by CPT. Most of the apparently loss-averse choice behavior results from probability weighting rather than from direct disutility experienced when an outcome is framed as a loss against an idiosyncratic reference point. We then consider implications of this finding for methodological debates about how to model welfare effects of policies, and argue that abandonment of a dogmatic belief in CPT as the correct theory of risk human choice exposes a conceptual error that is widespread in behavioral welfare economics. We provide concluding reflections on second-order, philosophical issues around the grounding of normative commitments in policy-focused economics. (shrink)

This paper argues that private property and rights assignment, especially as applied to communication infrastructure and information, should be informed by advances in both technology and our understanding of psychology. Current law in this area in the United States and many other jurisdictions is founded on assumptions about human behavior that have been shown not to hold empirically. A joint recognition of this fact, together with an understanding of what new technologies make possible, leads one to question basic assumptions about (...) how law is made and what laws we should have in a given area, if any. I begin by analyzing different aspects of U.S. law, from a high-level critique of law making to a critique of rights assignment for what I call 'simple nonrival goods.' I describe my understanding, as a non-lawyer with a background in psychology and computing, of the current conventions in U.S. law, consider the foundational assumptions that justify current conventions, describe advances in psychology and technology that call these conventions into question, and briefly note how the law might normatively change in this light. I then apply this general analysis to the question of domain name assignment by the Internet Corporation for Assigned Names and Numbers (ICANN). (shrink)

We re-examine the construct of Moral Hypocrisy from the perspective of normative self-interest. Arguing that some degree of self-interest is culturally acceptable and indeed expected, we postulate that a pattern of behavior is more indicative of moral hypocrisy than a single action. Contrary to previous findings, our results indicate that a significant majority of subjects exhibited fair behavior, and that ideals of caring and fairness, when measured in context of the scenario, were predictive of those behaviors. Moreover, measures of (...) Individualism/Collectivism appear more predictive of self-interested behavior than out-of-context responses to moral ideals. Implications for research and practice are discussed. (shrink)

Collaborative consumption is proposed as a potential step beyond unsustainable linear consumption patterns toward more sustainable consumption practices. Despite mounting interest in the topic, little is known about the determinants of this consumer behavior. We use an extended theory of planned behavior to examine the relative influence of consumers’ personal norms and the theory’s basic sociopsychological variables attitudes, subjective norms, and perceived behavioral control on collaborative consumption. Moreover, we use this framework to examine consumers’ underlying value and belief structure (...) regarding collaborative consumption. We measure these aspects for 224 consumers in a survey and then assess their self-reported collaborative consumption behavior in a second survey. Our structural model fits the data well. Collaborative consumption is more strongly—through intentions—influenced by personal norms and attitudes than by subjective norms. Personal norms to consume collaboratively are determined by consumers’ altruistic, biospheric, and egoistic value orientations. Cost savings, efficient use of resources, and community with others are found to be consumers’ attitudinal beliefs underlying collaborative consumption. We conclude that collaborative consumption can be pin-pointed neither as a mere form of economic exchange nor as a primarily normative form of sharing resources. Instead, collaborative consumption is determined by economic/egoistic (e.g., cost savings) and normative (e.g., altruistic and biospheric value orientations) motives. Implications for collaborative consumption research, the theory of planned behavior, and practitioners are discussed. (shrink)

This book explores the view that normative behaviour is part of a complex of social mechanisms, processes and narratives that are constantly shifting. From this perspective, norms are not a kind of self-contained social object or fact, but rather an interplay of many things that we label as norms when we 'take a snapshot' of them at a particular instant. Further, this book pursues the hypothesis that considering the dynamic aspects of these phenomena sheds new light on them. The (...) sort of issues that this perspective opens to exploration include: Of what is this complex we call a "social norm" composed of? How do new social norms emerge and what kind of circumstances might facilitate such an appearance? How context-specific are the norms and patterns of normative behaviour that arise? How do the cognitive and the social aspects of norms interact over time? How do expectations, beliefs and individual rationality interact with social norm complexes to effect behaviour? How does our social embeddedness relate to social constraint upon behaviour? How might the socio-cognitive complexes that we call norms be usefully researched? (shrink)

Law and economics scholarship suggests that, in appropriate cases, the law can improve people’s behavior by changing their preferences. For example, the law can curb discriminatory hiring practices by providing employers with information that might change their discriminatory preference. Supposedly, if employers no longer prefer one class of employees to another, they will simply stop discriminating, with no need for further legal intervention. The current Article aims to add some depth to this familiar analysis by introducing the insights of (...) behavioral ethics into the law and economics literature on preference change. Behavioral ethics research shows that wrongdoing often originates from semi-deliberative or non-deliberative cognitive processes. These findings suggest that the process of preference change through the use of the law is markedly more complicated and nuanced than previously appreciated. For instance, even if an employer’s explicit discriminatory stance is changed, and the employer no longer consciously prefers one class of employees over another, discriminatory behavior might persist if it originates from semi-conscious, habitual, or non-deliberative decision-making mechanisms. Therefore, actual change in behavior might necessitate a close engagement with people’s level of moral awareness. We discuss the institutional and normative implications of these insights and evaluate their significance for the attempt to improve preferences through the different functions of the legal system. (shrink)