Where to look for the morals in markets?

Matthias Sutter; Jürgen Huber; Michael Kirchler; Matthias Stefan; Markus Walzl

doi:10.1007/s10683-019-09608-z

Where to look for the morals in markets?

Exp Econ. 2020;23(1):30-52. doi: 10.1007/s10683-019-09608-z. Epub 2019 Mar 19.

Authors

Matthias Sutter^{1

2

3}, Jürgen Huber², Michael Kirchler^{2

4}, Matthias Stefan², Markus Walzl²

Affiliations

¹ 1Max Planck Institute Bonn, University of Cologne, Cologne, Germany.
² 2University of Innsbruck, Innsbruck, Austria.
³ 4Max Planck Institute for Research on Collective Goods, Kurt Schumacher Strasse 10, 53113 Bonn, Germany.
⁴ 3University of Gothenburg, Gothenburg, Sweden.

Abstract

There is a heated debate on whether markets erode social responsibility and moral behavior. However, it is a challenging task to identify and measure moral behavior in markets. Based on a theoretical model, we examine in an experiment the relation between trading volume, prices and moral behavior by setting up markets that either impose a negative externality on third parties or not. We find that moral behavior reveals itself in lower trading volume in markets with a negative externality, while prices mostly depend on the market structure. We further investigate individual characteristics that explain trading behavior in markets with negative externalities.

Keywords: Competition; Experiment; Markets; Morals.