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The Ethics of Incentivizing the Uninformed: A Vignette Study

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  • Sandro Ambuehl
  • Axel Ockenfels

Abstract

Our recent working paper (Ambuehl, Ockenfels, and Stewart 2017) shows theoretically and experimentally that people with higher costs of information processing respond more to an increase in the incentive for a complex transaction, and decide to participate based on a worse understanding of its consequences. Here, we address the resulting tradeoff between the principle of informed consent and the principle of free contract. Respondents to our vignette study on oocyte donation overwhelmingly favor the former and support policies that require donors to thoroughly understand the transaction. This finding helps design markets that are not only efficient but also considered ethical.

Suggested Citation

  • Sandro Ambuehl & Axel Ockenfels, 2017. "The Ethics of Incentivizing the Uninformed: A Vignette Study," American Economic Review, American Economic Association, vol. 107(5), pages 91-95, May.
    • Handle: RePEc:aea:aecrev:v:107:y:2017:i:5:p:91-95
    Note: DOI: 10.1257/aer.p20171109
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    References listed on IDEAS

    as
    1. Gary S. Becker & Julio Jorge Elías, 2007. "Introducing Incentives in the Market for Live and Cadaveric Organ Donations," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 3-24, Summer.
    2. Alvin E. Roth, 2007. "Repugnance as a Constraint on Markets," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 37-58, Summer.
    3. Grant, Ruth W., 2006. "Ethics and Incentives: A Political Approach," American Political Science Review, Cambridge University Press, vol. 100(1), pages 29-39, February.
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    Citations

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    Cited by:

    1. Van Borm, Hannah & Lippens, Louis & Baert, Stijn, 2022. "An Arab, an Asian, and a Black Guy Walk into a Job Interview: Ethnic Stigma in Hiring after Controlling for Social Class," IZA Discussion Papers 15707, Institute of Labor Economics (IZA).
    2. Van Borm, Hannah & Burn, Ian & Baert, Stijn, 2021. "What Does a Job Candidate's Age Signal to Employers?," Labour Economics, Elsevier, vol. 71(C).
    3. Philip J Held & Frank McCormick & Glenn M Chertow & Thomas G Peters & John P Roberts, 2018. "Would government compensation of living kidney donors exploit the poor? An empirical analysis," PLOS ONE, Public Library of Science, vol. 13(11), pages 1-14, November.
    4. Van Belle, Eva & Caers, Ralf & De Couck, Marijke & Di Stasio, Valentina & Baert, Stijn, 2017. "Why Is Unemployment Duration a Sorting Criterion in Hiring?," IZA Discussion Papers 10876, Institute of Labor Economics (IZA).
    5. Van Borm, Hannah & Baert, Stijn, 2022. "Diving in the Minds of Recruiters: What Triggers Gender Stereotypes in Hiring?," IZA Discussion Papers 15261, Institute of Labor Economics (IZA).
    6. Eva Van Belle & Ralf Caers & Marijke De Couck & Valentina Di Stasio & Stijn Baert, 2019. "The Signal of Applying for a Job Under a Vacancy Referral Scheme," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(2), pages 251-274, April.
    7. Shengwu Li, 2017. "Ethics and market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(4), pages 705-720.
    8. Viola S. Ackfeld, 2020. "The Aversion to Monetary Incentives for Changing Behavior," Working Paper Series in Economics 100, University of Cologne, Department of Economics.
    9. Kübler, Dorothea & Schmid, Julia & Stüber, Robert, 2018. "Gender discrimination in hiring across occupations: a nationally-representative vignette study," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55, pages 215-229.
    10. Baeckström, Ylva & Marsh, Ian W. & Silvester, Joanne, 2021. "Variations in investment advice provision: A study of financial advisors of millionaire investors," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 716-735.
    11. Kübler, Dorothea & Erkut, Hande, 2022. "Repugnant Transactions: The Role of Agency and Extreme Consequences," VfS Annual Conference 2022 (Basel): Big Data in Economics 264052, Verein für Socialpolitik / German Economic Association.

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    More about this item

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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