Edited by: Pablo Brañas-Garza, Middlesex University London, UK
Reviewed by: Charles Noussair, Tilburg University, Netherlands; Fabia Franco, Middlesex University, UK; Emmanuel Petrakis, University of Crete, Greece
*Correspondence: Nikolaos Georgantzis, Economic and Social Sciences Unit, School of Agriculture Policy and Development, University of Reading, Whiteknights, RG6 6AR, Reading, UK e-mail:
This article was submitted to the journal Frontiers in Behavioral Neuroscience.
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We study the behavior and emotional arousal of the participants in an experimental auction, leading to an asymmetric social dilemma involving an auctioneer and two bidders. An antisocial transfer (
A moral dilemma emerges when different motivations of human behavior dictate opposite actions in a given decision-making context. In economic situations, the most appealing type of dilemma concerns the conflict between selfish monetary reward maximization and adherence to some ethical pro-social norm, especially when the latter implies an economic loss. The emotional implications of such conflicts seem to originate, from the interplay between a basic impulse for greedy money-seeking motivations and alternative, more sophisticated social and personal ethical norms
Despite the broadly criticized reductionist construct of an emotionless utility-maximizing machine known as
Several authors have addressed different aspects of corruption in a variety of experimental settings. Regarding the framework adopted, we can distinguish between single-subject
The literature on
The framework studied here is inspired by Beck and Maher (
In the experiment, we implement the following payoffs:
Taking this payoff structure into account, implying that agents care only for the monetary consequences of their actions and assuming a continuous strategy space, the unique Nash equilibrium is such that both firms' bids involve (
We generalize the monetary payoff structure of the setup in (1–3), using a linear specification of utilities with an agent-specific psychological cost parameter, γ, capturing an agent's aversion to bribe due to ethical reasons, expressed as a loss per monetary unit of bribe received by the official. Thus, the three agents' utility levels after the end of the auction are given by:
Assuming perfect information on the agents' preferences and symmetry in the sense that each firm correctly predicts that its rival has a similar attitude to ethics, the following cases emerge:
If If
Summarizing, the model predicts that officials may choose the highest quality proposal if they are sufficiently bribery-averse, while they will choose the bidder with the highest bribe otherwise. In the perfect information setting discussed above, firms faced with a quality-maximizing auctioneer, will not bid with bribes, independently of their own preferences, whereas firms anticipating a bribery-maximizing behavior by the auctioneer will promise higher bribes, the less bribery-averse they are. In the case of uncertainty regarding the official's type, a generalized version of this model would produce a continuum of equilibrium predictions, depending on the percentage of pro-social officials and the distribution of bribery-aversion costs. While the development of a general model with these characteristics is beyond the scope of this paper, it is rather straightforward consequence of our setup that the distribution of officials' and firms' bribery-aversion parameters will have the expected result of less bribery and more pro-social project choices, the higher the density of bribery-aversion parameters on larger values.
Two treatments were run
A total of 93 subjects participated in the experiment following the usual recruitment and ethical clearance protocols used in the LEE at the Universitat Jaume I (Castellón, Spain)
The experiment was computerized using the z-Tree toolbox (Fischbacher,
Physioeconomics is a new interdisciplinary area of research, combining experimental economics and psychophysiology. Both disciplines use computerized solutions to manage stimuli, strategies, feedback and collect the data. The hardware and software used in our study pose a challenge regarding the need to collect and interactively communicate the timing of behavioral and physiological events across the two computer systems. We have used a solution which to the best of our knowledge has not been previously used in any physioeconomics study so far. As argued in Perakakis et al. (
The behavioral results reported here are based on the sample of 93 participants (31 officials and 62 firm-subjects). Following the two random matchings and role assignments, in T0 there were 15 male officials and 32 male firm-subjects, whereas in T1 there were 13 male officials and 34 male firm-subjects
Figure
From the discussion so far, we have seen that in our setup intrinsic pro-social motivations co-exist with extrinsic motivations like standard monetary reward maximization and the additional threat of punishment for anti-social behavior. Having created these motivations in the laboratory environment, we are now interested in the emotions triggered by different stages of the decision-making process, as well as by the feedback received. Figure
While the discussion so far concerns emotions triggered by subjects' decisions, emotional arousal may also emerge from the anticipation of the consequences of others' actions. A rather expected pattern concerns the emotional response obtained due to the anxiety experienced by the winners while waiting for the loser's decision to activate an inspection or not. Figure
We argue here that emotional arousal emerges from a conflict between monetary and ethical attractors of behavior. Thus, we would expect ethical decisions dictated by pro-social incentives to lead to emotional arousal if the corresponding decision contradicts the basic instinct of selfish monetary reward maximization. Our results are compatible with this view. First of all, we find a positive and significant correlation (Spearman ρ = 0.12,
Thus, in our case, emotional choices can be seen as choices that create conflict or internal dissonance that probably needs even more cognitive processing or reasoning in order to resolve the conflict and make a decision. Rubinstein (
Economic decisions are often made in contexts generating conflicting motivations. Such conflicts have increasingly attracted the attention of economists, psychologists and decision theorists. Several studies, like Coricelli et al. (
Future research should pursue obtaining more evidence on the correlation between response times and physiological manifestations of emotions. The extent to which the former can be used as a proxy of the other is of great interest to behavioral economists. Furthermore, more evidence is needed in order to establish the share of
All authors participated in the design and implementation of the experiments. Pandelis Perakakis designed the process and analyzed the data related to the continuous measurement of skin conductance. Aurora García-Gallego and Nikolaos Georgantzis are responsible for the solution of the theoretical model. Tarek Jaber-López proposed the basic experimental design and performed the analysis of the data, including figures and tables. Nikolaos Georgantzis edited most of the manuscript, helped by all other authors.
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
The authors gratefully acknowledge the three reviewers of this journal. Financial support by the Spanish Ministry of Economía y Competitividad (project ECO2011-23634 and grant JCI-2010-06790) is gratefully acknowledged. Also, Tarek Jaber-López acknowledges financial support by the Universitat Jaume I (doctoral grant PREDOC/2010/25).
The Supplementary Material for this article can be found online at:
1As for example, in Bolton and Ockenfels (
2For example, the studies by Frank and Schulze (
3Abbink et al. (
4Cameron et al. (
5Based on a design by Azfar and Nelson (
6For example, Serra (
7As opposed to
8Sanfey et al. (
9Van't Wout et al. (
10The use of round numbers facilitates subjects' calculations of the consequences of their actions.
11The corresponding expected payoff matrix for the firms' bidding subgame is provided in the supplementary material.
12These equilibrium bids correspond to the continuous strategy case. With discrete strategies, equilibrium (
13Instructions to the subjects are provided in the supplementary material of the paper.
14Specifically, 46 male and 47 female undergraduate student-subjects were recruited by means of the ORSEE software (Greiner,
157 sessions of 12 subjects and one of 9 subjects.
16A photodiode is a type of photodetector capable of converting light changes into electric signals.
17Gender differences were statistically non-significant for behavioral results in T1 and physiological responses throughout the study. The only gender differences found in T0 is that women in the role of firms bribe more (Mann-Whitney