Moral Accounting and Real Effort: Experimental Evidence

Summary:  View help for Summary The literature on moral accounting suggests that individuals who face consecutive decisions are influenced by behavioral spillovers, where the moral consequences of initial decisions affect behavior in subsequent decisions. Results on the relevance of moral accounting are mixed, which can (partially) be attributed to the fact that studies differ by whether subjects in the first stage decide themselves on morally questionable decisions or are, instead, randomly assigned to moral conditions using priming. Our contribution is threefold: First, most papers consider donation in the second stage, while we apply a real effort setting. Second, our treatments allow us to determine the impact of active decisions compared to random assignment in stage 1. Third, we develop a behavioral game-theoretical model that structures the trade-off between self-selection and moral accounting. We find evidence for moral accounting if and only if subjects actively take the money in the first stage.

Funding Sources:  View help for Funding Sources Frankfurt School of Finance & Management; Victoria University of Wellington