Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114124
Authors: 
Irlenbusch, Bernd
Saxler, David
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9240
Abstract: 
A recent debate raises the question whether market interaction erodes social responsibility. In an experiment, we disentangle three major characteristics of market interaction, diffusion of responsibility, social information, and market framing, and provide evidence for how these characteristics influence behavior when trade harms uninvolved parties. We model the negative externalities from trade by reducing donations to a charity that provides meals to needy children. Our results show that diffusion of responsibility tends to encourage subjects to make purely self-interested decisions. This holds to a much larger extent if the economic trans- action is framed as a market. In contrast, social information increases social responsibility in our setting. Observing the behavior of others seems to convince a substantial fraction of people to behave steadfastly, i.e., they avoid trading a good that comes with negative externalities, even if gains from trade are high.
Subjects: 
social responsibility
diffusion of responsibility
social information
market framing
experiment
JEL: 
C92
D47
D62
M14
Document Type: 
Working Paper

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