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Of Morals, Markets and Mice: A Comment on Falk and Szech

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  • Friedrich Breyer
  • Joachim Weimann

Abstract

A recent experimental study by Falk and Szech (Science, 2013) concludes 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. This would be no less than a revolution in normative economics. In this note we demonstrate that the claim made by Falk and Szech is unfounded and that their experimental results can be (and should be) interpreted in exactly the opposite way.

Suggested Citation

  • Friedrich Breyer & Joachim Weimann, 2014. "Of Morals, Markets and Mice: A Comment on Falk and Szech," CESifo Working Paper Series 4745, CESifo.
    • Handle: RePEc:ces:ceswps:_4745
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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.
    4. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
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    Cited by:

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    2. René Ruske, 2015. "Does Economics Make Politicians Corrupt? Empirical Evidence from the United States Congress," Kyklos, Wiley Blackwell, vol. 68(2), pages 240-254, May.
    3. Irlenbusch, Bernd & Saxler, David, 2015. "Social Responsibility in Market Interaction," IZA Discussion Papers 9240, Institute of Labor Economics (IZA).
    4. Hannes Rusch, 2015. "Do Bankers Have Deviant Moral Attitudes? ?Negative Results from a Tentative Survey," Rationality, Markets and Morals, Frankfurt School Verlag, Frankfurt School of Finance & Management, vol. 6(92), January.
    5. Bernd Irlenbusch & David J. Saxler, 2015. "Social responsibility in market interaction," Cologne Graduate School Working Paper Series 06-05, Cologne Graduate School in Management, Economics and Social Sciences.
    6. Michael P. Schlaile & Katharina Klein & Wolfgang Böck, 2018. "From Bounded Morality to Consumer Social Responsibility: A Transdisciplinary Approach to Socially Responsible Consumption and Its Obstacles," Journal of Business Ethics, Springer, vol. 149(3), pages 561-588, May.

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    More about this item

    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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