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HSE Seminar on Political Economy: Gari Walkowitz (Technical University of Munich, Center Digitization.Bavaria) about the Economic Consequences of Moral Hypocrisy

Gari Walkowitz discussed the effectiveness of (apparently) fair procedures - which are under the full control of the agent in situations which entail a conflict of interest and when social pressures to conform are high - and analyzed a specific form of inter-personal deception: moral hypocrisy, i.e., saying one thing (trying to appear moral to others) but doing another (act immorally).

Topic: Hiding Behind Fig Leaves – The Economic Consequences of Moral Hypocrisy

Abstract: We analyze a specific form of inter-personal deception: moral hypocrisy, i.e., saying one thing (trying to appear moral to others) but doing another (act immorally). We run a series of simple dictator game experiments. The dictator has three options: 1) she can directly implement a fair outcome; 2) she can directly implement an unfair outcome; 3) she can flip a coin (the “fig leaf”) in private to determine either outcome. The results are the following: i) Dictator behavior significantly changes when a fig leaf is available: many dictators are willing to apply a “fair” procedure but only if they can fudge the results of the coin flip. ii) The latter effect is stronger under increased publicity and also appears if the use of the coin is costly. iii) Moral hypocrites exactly know what they are doing. They do not deceive themselves but the receiver. iv) The availability of the (non-binding) coin option significantly reduces the number of fair allocations. v) As potential remedies against hypocritical behavior, we identify: ask subjects to provide more details about the coin toss; provide common information that the coin leads to unfair behavior; make the coin costly (this only helps partly). Our paper contributes to the debate on the origins of pro-social behavior. From an applied perspective, the effectiveness of (apparently) fair procedures - which are under the full control of the agent in situations which entail a conflict of interest and when social pressures to conform are high - must be challenged.

the joint seminar of Higher School of Economics on political economy, International Center for the Study of Institutions and Development (ICSID) and NES Center for the Study of Diversity and Social Interaction (NES CSDSI) was held on November 14.

Moderators: Alexei Zakharov (HSE), Konstantin Sonin (HSE, The University of Chicago Harris School of Public Policy)