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Morals Matter in Economic Games

In a past lecture we were introduced to the concept that in economic games because humans are not abstract agents with only a concrete payoff in mind in negotiations their payoffs include not only the money, but also some notion of being treated and treating others fairly. We talked about the decisions that people tend to make in real-life trials of The Ultimatum and Dictator Games, but didn’t go in depth into the specific moral obligations driving those decisions, which is what this article attempts to do. Using Rai and Fiske’s Relationship Regulation Theory (RRT) as a model for other-regarding behavior, the authors explored the psychological mechanisms underlying participants’ behavior in economic games via a series of four experiments.  RRT argues that people formulate moral decisions through “relationship regulation” which boils down to four basic moral “motives”: Unity, Hierarchy, Equality, and Proportionality, which are embedded in four types of relational models: Communal Sharing, Authority Ranking, Equality Matching, and Market Pricing respectively. Perhaps most relevant to this course is the Proportionality moral motive and Market Pricing relational model, as they are essentially behind the payoff calculations we’ve been discussing.

What the authors found is that—in keeping with the examples we discussed in lecture—when asked to make decisions involving other people, people consider the associated interpersonal risks far more strongly than the risks associated with the deal itself. They also found that Proportionality undermines the “Golden Rule” of “treat others how you wish to be treated” and that offering participants money as an incentive can induce proportionality and make them distance themselves from other participants in the economic game.

Source: http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0081558

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