Values and Moral Dilemmas

Question 1

Values - defintion(s)

Answer 1

• attitudes towards people and planet, resulting in behavior generally deemed as good
• “a deeply rooted belief” that guides our decisions
• social constructs, i.e. long-lasting beliefs, sensitize us for what makes life worth living
• can help to live more ethically and morally correct
• but are often formed internally, without conscious decision and can thus be destructive (e.g. money in itself)

Question 2

(Pre-)Study Findings

Answer 2

• majority thinks its very likely they will encounter business situations in conflict with their values
• trust, wrong doing (whistleblowing) hs been observed by >40%

Question 3

Behavioral Economics & Ethics

Answer 3

• goal of behavioral economics: increase explanatory, predictive power of economics
• realistic psychological foundation
• Deviations from standard economic model:
  boundedly ethical and rational behavior, e.g heuristics, imitation
  non-standard preferences, e.g. social preferences and loss aversion

Question 4

Experiments, Behavioral Economics and -Ethics

Answer 4

• progress of behavioral economics and ethics is closely related to the use of experiments
• allow tight control and direct test of basic assumptions about rationality
• can also be used in moral decision making contexts

Question 5

Experiment “The Role of Consequences” Gneezy 2005

Answer 5

• Question: Identifying the psychological costs of lying
• Setup: Cheap Talk Game the receiver chooses an option providing a monetary payoff for him and the sender
• one option provides more money for the receiver, the other more money for the sender
• only the sender knows which option has which payoff structure and has to provide the receiver with the information, i.e. has information advantage that he can exploit to his own advantage
• different treatment groups with higher payoffs from lying
• Higher expected losses for the receiver kept the senders from lying
• more people lie if their gain in absolute and relative terms is higher than the loss of the other party involved
• When one else was involved (cheap talk game?) they tended to lie even more often

Question 6

Lies in Disguise - Experimental Study on Cheating (Fischbacher; Heusi)

Answer 6

• Question: do people always lie to the full extent?
• Setup: participants privately rolles a fair dice & reported the numbers
• each number = respective monetary units except fir 6, with a payoff of 6
• not all people reported “evenly”, and mentioned that 6 was rolled. The distribution was not normal (i.e. incomplete lying)
• Explanation: greed aversion, intention to disguise the lie, maintaining a positive self-concept

Question 7

Lying Aversion and the Size of the Lie (Gneezy, Kajackaite, Sobel 2018)

Answer 7

Question: Analyze the motives of not lying to the full extent
3 different dimensions of the size of a lie :
- outcome dimension: the larger the distance between the reported and received number
Setup: Numbers Game
click one of 10 boxes, note the number displayed. Sum will be payoff for participant. Those who lied provenly, lied to full extent (since they expected computer would detect the lie)

• payoff dimension: the larger the distance between the reported and received payoffs. Words game: same setup, numbers were replaced with words. No incomplete lying was possible. Even more people lied to full extent.
• reputational concern: the lower the probability that statement is ex-ante true, the bigger the lie. Basic Game, same setup, but with envelopes that were opened privately. More ppl lied, more of them lied incompletely. Incomplete lying mainly driven by reputational concerns

Question 8

Lying and Team incentives (Conrads, 2013)

Answer 8

• Question: how does teamwork influence unethical workplace behavior?
• setup: individual vs team
• anonymously roll fair dice, report numbers received on sheet of paper.
• payoff for each participant differs between treatment groups. Rolling a 6 = 0€
• Treatment individual: payoff = sum of numbers reported, except for 6
• treatment team payoff = average of own reported numbers and those of a randomly matched other participant.
  Result: more people in the team lied to the full extent. (either social preferences, i.e. to benefit team members or shared responsibility)
  -

Question 9

Lying and Team incentives (Conrads, 2013) - Team Mixed ?

Answer 9

Treatment: team I received payoff of average of own die-roll and a computerized, honest die-roll (to account for the tendency to shift responsibility to the other team mate). And test group, where average of both participant’s reported die-rolls was measured.
Result: diffusion of responsibility as main driver of lying behavior, not social preferences (i.e. lying to benefit the team members)

Question 10

When CSR backfires (List & Momenti 2017/18(

Answer 10

• Question: does the CSR of the company have negative effects on workers productivity, doe to moral licensing, i.e. “my company does well, so I don’t have to do well additionally”
• setup: participants have to transcribe scans of old, foreign-language books, asked about readability beforehand.
• Opportunity to reduce the workload by lying, keep up with the same wage.
• Treatment baseline: receiving full wage for working.
• Treatment firm: receiving the wage and 5% is donated to charity in name of firm.
• treatment worker: receiving wage and 5% is donated to charity in own names.
  Results: higher tendency to lie in treatment worker & firm groups. Strong evidence for moral licensing. Workers have highest rate of cheaters.

Question 11

The hidden cost of control (Falk & Kosfeld 2006)

Answer 11

• How does decision to control affect agent’s willingness to support the principal in general and how does this result change with different intensities of control?
• Setup:
• Agents: 120 points, reflecting benefit from not working. Principals, 0 points as starting point.
• Agents choose desired level of productivity, associated with losing the respective points.
  Principal will receive double the points lost by agents.
• principals decide whether or not to restrict range of points the agents can invest (different minimum productivity levels)
• afterwards, agents can again state their preferences regarding productivity levels.
  Result: Agents are willing to work more if principals don’t control. (i.e hidden costs of control)
  If principals control, agents tend to decide for the minimum productivity level required.

Question 12

Short Version: Size of the Lie, Gneezy and Kajackaite, Sobel)

Answer 12

Determinants of the size of a lie:
1) Outcome dimension: the larger the distance between the truth and what is reported, the bigger the lie
2) payoff dimension: the larger the monetary gains generated by the lie vs the truth, the bigger the lie.
3) Reputational concern: the lower the probabiltiy that a statement is ex ante true, the bigger the lie.
Removing the outcome dimension, i.e. the relative perceived distance between lie and truth, makes everybody who lies, lie to the full extent.

Question 13

Dishonesty and CSR

Answer 13

Two channels through which CSR can influence employee misbehavior:

1) Positive reciprocity: social incentive tool for motivating workers to reduce unethical behavior
2) Moral licensing :
- prosocial behavior is motivated in part by self- and social image motives: people act socially in part to signal themselves and others that they are moral individuals
- but people can feel immunized against negative inferences when they have recently done good and thus act less morally constrained

Question 14

Detecting Lies

Answer 14

People believe they can detect lies

• e.g. with polygraphs
• overconfidence in ability to detect deception: the receiver does not question own ability even if he is informed about the deception
• people suffer from a very strong bias that they can believe they can detect lies and deception