Satisfaction Guaranteed: When Moral Hazard Meets Moral Preferences

• 成果类型: Article
• 署名作者: Andreoni, James
• 署名单位: University of California System; University of California San Diego; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20170119
• 发表日期: 2018
• 页码: 159-189
• 关键词: social preferences; gift-exchange; Contract enforcement; lying aversion; labor-markets; Trust game; RECIPROCITY; fairness; COOPERATION; COMPETITION

摘要

The fear of moral hazard-especially in the age of internet commerce-can depress or prevent profitable trades. Experiments show, however, that many people prefer honesty to deceit and would not succumb to moral hazard. This paper asks whether we can find a simple, voluntary institution that can empower moral traders, drive out amoral ones, reduce moral hazard, and restore profitable trade to markets. I find that selling goods with a satisfaction guarantee, accompanied by potentially minor legal or reputational enforcement, allows moral preferences to defeat moral hazard.