Social preferences or sacred values? Theroy and evidence of deontological motivations

Article in a working paper series

Daniel L. Chen and Martin Schonger, "Social preferences or sacred values? Theroy and evidence of deontological motivations", IAST working paper, n. 16-59, October 2016.[Full text]

Abstract

Recent advances in economic theory, largely motivated by experimental findings, have led to the adoption of models of human behavior where a decision-maker not only takes into consideration her own payoff but also others’ payoffs and any potential consequences of these payoffs. Investigations of deontological motivations, where a decision-maker makes her choice not only based on the consequences of a decision but also the decision per se have been rare. We propose an experimental method that can detect an individual’s deontological motivations by varying the probability of the decision-maker’s decision having consequences. It uses two states of the world, one where the decision has consequences and one where it has none. We show that a purely consequentialist decision-maker whose preferences satisfy first-order stochastic dominance will choose the decision that leads to the best consequences regardless of the probability of the consequential state. A purely deontological decision-maker is also invariant to the probability. However, a mixed consequentialist-deontological decision-maker’s choice changes with the probability. The direction of change gives insight into the location of the optimand for one’s duty. We provide a formal interpretation of major moral philosophies and a revealed preference method to detect deontological motivations and discuss the relevance of the theory and method for economics and law.

Keywords

Consequentialism
deontological motivations
normative commitments
social preferences
revealed preference
decision theory
first order stochastic dominance
random lottery incentive method

IAST Discipline

Economics
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