Moral Costs and Rational Choice: Theory and Experimental Evidence

49 Pages Posted: 9 May 2016 Last revised: 3 Apr 2022

See all articles by James C. Cox

James C. Cox

Georgia State University

John A. List

University of Chicago - Department of Economics

Michael Price

Georgia State University - Department of Economics

Vjollca Sadiraj

Georgia State University - Department of Economics

Anya Samek

University of California, San Diego (UCSD) - Rady School of Management; Center for Economic and Social Research (CESR)

Date Written: May 2016

Abstract

The literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics—the contraction axiom—within a sharing framework. Making use of more than 325 dictators participating in a series of allocation games, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with moral reference points to explain our experimental data. Our theory also organizes the broader sharing patterns in the received literature.

Suggested Citation

Cox, James C. and List, John A. and Price, Michael and Sadiraj, Vjollca and Samek, Anya, Moral Costs and Rational Choice: Theory and Experimental Evidence (May 2016). NBER Working Paper No. w22234, Available at SSRN: https://ssrn.com/abstract=2777322

James C. Cox (Contact Author)

Georgia State University

John A. List

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

Michael Price

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Vjollca Sadiraj

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Anya Samek

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive #0553
Rady School of Management
La Jolla, CA 92093-0553
United States

HOME PAGE: http://anyasamek.com

Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

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