Of mice, markets, and morals

In an interesting psychology experiment that I’m nonetheless surprised is still kosher in the post-Milgram era, researchers decided to test the effect of market interactions on the moral decision-making of test subjects. Essentially, they were wondering what value a person places on the life of a mouse. A particular mouse. Who you’ve basically been introduced to:

In all treatments of the experiment (16), whichwas approved by the Ethics Committee of theUniversity of Bonn, subjects were explicitly in-formed about the consequences of their decision.They knew that their mouse was a young and healthy mouse, which in case it survived wouldin expectation live for about 2 years in an ap-propriate, enriched environment, jointly with a few other mice. For illustrative purposes, we presented to subjects the picture of a mouse on an instruction screen (fig. S1). The instructions informed subjects explicitly about the killing process, in case they decided to kill their mouse. The killing process was also shown in a short video that was presented to subjects (17).

The mice used in the experiment were so-called "surplus" mice: They were bred for animal experiments, but turned out to be unsuited for study, e.g., because some specific gene manipulation had failed. They were perfectly healthy, but keeping them alive would have been costly. Although it was true that the mice would live or be killed based on the decisions of subjects in the experiment, the default for this population of mice was to be killed, as is common practice in laboratories conducting animal experiments. 

So what does all of this have to do with economics? Well, the researchers — Armin Falk of the University of Bonn and Nora Szech of the University of Bamberg set up several small markets for mouse lives: 

In the individual treatment, subjects faced asimple binary choice, labeled option A and op-tion B. Option A implied that the mouse wouldsurvive and that the subject would receive nomoney. Option B implied the killing of the mouse and receiving 10 euros. This treatment informs usabout the fraction of subjects who are willing to kill the mouse for 10 euros. One hundred and twenty-four subjects participated in this treatment.

To study markets, we implemented the so-called double auction market institution, which iswidely used in economics to investigate marketoutcomes [for an overview, see (19)]. In the bi-lateral double auction market, one seller and onebuyer bargained over killing a mouse for a totalgain of 20 euros that the two parties could split upbetween themselves. The seller was endowed witha mouse. As in the individual treatment, he or she was explicitly told that the"life of the mouseis entrusted to your care."Bargaining over the20 euros was conducted during a continuousauction, i.e., buyer and seller could make asmany price offers as they liked (16). If a buyer and a seller agreed on a trade, the buyer received20 euros minus the price agreed upon. The seller received the price. In addition, the mouse of theseller was killed, reflecting a situation in whichtrade takes place to the detriment of a third party.If a seller or a buyer did not trade, earnings for both were zero and the mouse survived. A sellerin the bilateral market was in the same situation as a subject in the individual treatment in that heor she could either refuse a monetary amount oraccept a monetary amount and kill a mouse. Subjects were told that no market participant wasforced to make price offers or to accept an offer,that their mouse would be killed only if a tradeoccurred, and that the mouse would survive if they decided not to trade. There were 10 trading periods. Seventy-two subjects participated in this treatment.

The multilateral double auction market treatment was exactly like the bilateral market treatment, except that in this condition seven buyers and nine sellers bargained over prices (16). The nine sellers were all endowed with one mouse each. Subjects on both sides of the market couldmake as many price offers as they liked. All subjects could accept a price offer from the otherside of the market. Available price offers of bothmarket sides were always shown on a screen. Once a price offer of a trader was accepted, tradeoccurred implying the killing of a mouse. Pay off consequences were identical to those of the bi-lateral market. There were 10 periods. We ran six sessions with a total of 96 subjects

Surprise, surprise, the more complex the market, the worse Mickey fared. In the individual treatment, 45.9 percent of the subjects were willing to let the mouse die for 10 euros. In the bilateral market, 72.2 percent were willing to kill the mouse for prices at or below 10 euros. In the multilateral market, it was 75.9 percent.

The authors argue that this shows how market interactions lower people’s normal moral standards:

Many people express objec-tions against child labor, other forms of exploitationof the workforce, detrimental conditions for ani-mals in meat production, or environmental damage. At the same time, they seem to ignore theirmoral standards when acting as market participants, searching and buying the cheapest electronics, fashion, or food, and thereby consciouslyor subconsciously creating the undesired nega-tive consequences to which they generally object.

Well, okay, but the emphasis on "markets" seems to imply that it’s the exchange of money or the ideology of capitalism that’s to blame. But we already know — Milgram again — that people’s moral standards tend to change when they’re in large groups or institutional settings where other people are doing the same thing. That’s may be as true for shoppers at a mall as it is for bureaucrats or soldiers.

It doesn’t seem that surprising to me that when people were in a group of people haggling over mouse lives — and in an experimental setting where the researchers were tacitly approving of what they were doing — they were more willing to play along than when the weight of the decision was all on them.