Efficiency-Morality Trade-Offs in Repugnant Transactions: A Choice Experiment

92 Pages Posted: 19 Sep 2016

See all articles by Julio Elias

Julio Elias

University of CEMA

Nicola Lacetera

University of Toronto - Strategic Management; University of Toronto at Mississauga - Department of Management; National Bureau of Economic Research (NBER)

Mario Macis

Johns Hopkins University - Carey Business School; IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

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Abstract

Societies prohibit many transactions considered morally repugnant, although potentially efficiency-enhancing. We conducted an online choice experiment to characterize preferences for the morality and efficiency of payments to kidney donors. Preferences were heterogeneous, ranging from deontological to strongly consequentialist; the median respondent would support payments by a public agency if they increased the annual kidney supply by six percentage points, and private transactions for a thirty percentage-point increase. Fairness concerns drive this difference. Our findings suggest that cost-benefit considerations affect the acceptance of morally controversial transactions, and imply that trial studies of the effects of payments would inform the public debate.

Keywords: repugnant transactions, efficiency, morality, markets, preferences

JEL Classification: C91, D01, D63, D64, I11

Suggested Citation

Elias, Julio and Lacetera, Nicola and Macis, Mario, Efficiency-Morality Trade-Offs in Repugnant Transactions: A Choice Experiment. IZA Discussion Paper No. 10187, Available at SSRN: https://ssrn.com/abstract=2840131 or http://dx.doi.org/10.2139/ssrn.2840131

Julio Elias (Contact Author)

University of CEMA ( email )

1054 Buenos Aires
Argentina

Nicola Lacetera

University of Toronto - Strategic Management ( email )

Canada

University of Toronto at Mississauga - Department of Management

Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mario Macis

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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