Markets and morality: how markets shape our (dis)regard for others

Abstract

Abstract Scholars since Hume and Smith have debated possible causal connections between market experiences and moral beliefs. Here, we study the impact of market interactions on utilitarian versus deontological values, charitable donations, and whether individuals have differential in-group/out-group moral views. We randomly assign workers residing across several nations of varying income levels to different market conditions and found that, in low-income nations, tournament-based compensation increased deontological commitments, especially toward out-group members, and donations by productive workers, but decreased donations by less productive workers. In higher-income nations, the effect on deontological commitments reversed, while effects on out-group attitudes and donations became insignificant. These findings suggest that if utilitarian attitudes lead to more market-oriented policies, then multiple steady states arise wherein some countries sustain high levels of utilitarian attitudes and economic growth alongside progressively weakening deontological commitments and interpersonal regard for others, putting economic rationality and liberal moral development at odds.