Economics Seminar (IBE/Theory) James Konow, Loyola Marymount University


3:30 to 5 p.m., Dec. 6, 2023


James Konow, Professor of Economics, Loyola Marymount University

Moral Salience and Conditional Altruism: Reconciling Jekyll and Hyde Paradoxes

The results of many observational and experimental studies reveal an economically and socially important paradox: people sometimes behave morally in certain situations but then behave immorally (or, at least, less morally) under conditions that differ for reasons that seem morally irrelevant. These patterns are inconsistent with both theories of rational self-interest as well as with theories that incorporate stable social preferences. This paper introduces the concept of moral salience and applies it to a model of allocative preferences called conditional altruism. The result is a parsimonious theory that is general enough generate predictions consistent with both classic findings on social preferences as well as the newer paradoxes, including the effects on moral behavior of experimentally introducing uncertainty, exit options, the ability to take from others, and the possibility to destroy or create earnings of others. In addition, the theory is specific enough to be refutable based on forces that are empirically identifiable. Indeed, it may be seen as a generalization of social preference theories as well as various other approaches, including those based on self-deception, moral reference points, and social image. The paper also reports an out-of-sample test of one of the anomalies that corroborates the assumptions and implications of the theory.