Doing the right thing (or not) in a lemons-like situation: on the role of social preferences and Kantian moral concerns

TL;DR

This study investigates how social preferences and Kantian moral concerns influence individuals' willingness to engage in ethically questionable market actions, using a laboratory experiment with framing and role uncertainty variations.

Contribution

It provides experimental evidence on the impact of moral considerations and role framing on decision-making in market-like dilemmas, highlighting the importance of moral reasoning.

Findings

Morally motivated individuals consider role-reversal consequences.

Framing influences willingness to 'sell a lemon'.

Role uncertainty affects moral decision-making.

Abstract

We conduct a laboratory experiment using framing to assess the willingness to ``sell a lemon'', i.e., to undertake an action that benefits self but hurts the other (the ``buyer''). We seek to disentangle the role of other-regarding preferences and (Kantian) moral concerns, and to test if it matters whether the decision is described in neutral terms or as a market situation. When evaluating an action, morally motivated individuals consider what their own payoff would be if -- hypothetically -- the roles were reversed and the other subject chose the same action (universalization). We vary the salience of role uncertainty, thus varying the ease for participants to envisage the role-reversal scenario.