When work becomes a game: the moral costs of gamified labor

The problem of moral sunk costs pervades decision-making with respect to war. In the terms of just war theory, it may seem that incurring a large moral cost results in permissiveness: if a just goal may be reached at a small cost beyond that which was deemed proportionate at the outset of war, how can it be reasonable to require cessation? On this view, moral costs already expended could have major implications for the ethics of conflict termination. Discussion of sunk costs in moral theorizing about war has settled into four camps: Quota, Prospect, Addition, and Discount. In this paper, I offer a mathematical model that articulates each of these views. The purpose of the mathematisation is threefold. First, to unify the sunk costs problem. Second, to show that these views differ in the nature of their justifications: some are justified qualitatively and others quantitatively. Third, to clarify the differential force of qualitative and quantitative critiques of these four views.

Strategic sellers on some online selling platforms have been recently using a conditional-rebate strategy to manipulate product reviews under which only purchasing consumers who post positive reviews online are eligible to redeem the rebate. A key concern for the conditional rebate is that it can easily induce fake reviews which might be harmful to society. We develop a micro-behavioral model capturing consumers' review-sharing benefit, review-posting cost, and moral cost of lying to examine the seller's optimal pricing and rebate decisions. We derive three equilibria: the no-rebate, authentic-review equilibrium, the low-rebate, boosted-positive-review equilibrium, and the high-rebate, fake-review equilibrium. We find that the seller's optimal price and rebate decisions critically depend on both review-posting cost and moral cost. The seller adopts the no-rebate strategy when the review-posting cost is low but the moral cost is high, the low-rebate strategy when the review-posting cost is high or when review-posting cost is intermediate and the moral cost is high, and the high-rebate strategy when the review-posting cost is not too high and the moral cost is low. Our results suggest that it is not always profitable for strategic sellers to adopt the conditional-rebate strategy. Even if the conditional-rebate strategy is adopted, it does not always result in fake reviews. Furthermore, we find that when a low (high) rebate is offered, if the review-posting cost is not too high (very low), the conditional-rebate strategy can even lead to higher social welfare than a benchmark with no rebate. Our findings shed new light on the online-platform policy debate about the fake-review phenomenon induced by conditional rebates.

Political corruption has not disappeared with modernization, as some scholars believed would happen. On the contrary, corruption in Western democracies is often described as 'systemic', 'institutionalized' or 'diffuse'. At the same time, the political class is said to have undergone considerable change: catch-all parties and 'media power' have changed the structure of political careers and created new types of professional politician. Little thought, however, has been given to the specific consequences of corruption for the political class. How do the careers of corrupt politicians evolve? What are the capabilities required of a politician who participates systematically in corrupt exchange? What are the motivations which push individuals, in situations of widespread corruption, in the direction of politics? These are the questions with which the present article proposes to deal. In the first section some hypotheses will be presented on the alterations caused in representative democratic regimes by corruption. In particular, the idealtype of the 'business politician' will be defined as one possessing the abilities necessary for the functioning of the system of corruption. Thereafter, an application of these hypotheses to empirical research will be proposed. The results of an investigation of a number cases of political corruption in local government in Italy will be used to illustrate some of the attributes of the 'business politician': in particular the skills in illegality enabling the organization of corrupt exchange (part II), the networking abilities corrupt politicians utilize to create support and complicity (part III) and, lastly, the fact that politics is their only available route to upward mobility (part IV). In part V, a contribution to the theory of political corruption will be offered, starting from the concept of 'moral cost'. Proceeding deductively, we will discuss the conditions which reduce the moral cost of participation in illegal activities and therefore increase willingness to participate in corrupt dealings.

This study presents moral cost as a novel behavioral constraint on firm resource adjustment, specifically layoff decisions that can cause severe harm to employees. Revising the prevailing negative view of managers as purely self-interested, we propose that managers care about their employees and incur moral cost from layoffs. We leverage expansions in unemployment insurance as a quasi-natural experiment that reduces economic hardship for laid-off workers and, in turn, the moral cost of layoffs to managers. We find that these expansions license larger layoffs. The effects are stronger for chief executive officers (CEOs) with stronger prosocial preferences who dismiss fewer workers despite low performance, such as non-Republican, internally promoted, small town, or family firm CEOs, and weaker for CEOs who lack the discretion to avoid moral cost due to shareholder or financial pressures. Our findings suggest that the role of moral cost is substantial but also highly heterogeneous and readily suppressed by external pressures. Supplemental Material: The online appendices are available at https://doi.org/10.1287/orsc.2022.16734 .

Using staggered expansions of unemployment insurance (UI) benefits, this study examines moral costs as a constraint on managers’ layoff decisions and more generally, firm resource adjustment. UI not only reduces the burden for the unemployed but also the moral cost of layoffs to their managers. We show that expanding UI leads to larger layoffs in firms experiencing negative economic shocks. The licensing effects are stronger for weakly governed or financially unconstrained firms, whose managers have greater discretion to avoid moral cost and keep marginal workers on their payroll, and for non-Republican or internally promoted CEOs, who show stronger prosocial concerns and lay off fewer workers despite low performance. This study presents moral cost as a novel microeconomic channel through which UI affects layoff decisions, which can compromise its effectiveness as a social insurance program and an automatic stabilizer.

Utilitarian or deontological models of moral behavior—What predicts morally questionable decisions?

While recent empirical evidence reveals some effective interventions in preventing corruption among bureaucrats and politicians, there has been little discussion on how to prevent the bribe-giving behavior of ordinary citizens. This paper investigates the role of social media information in influencing the supply of bribes by citizens instead of the demand side. We, therefore, developed and published an original news application in India and implemented a 3-month experiment. In this application, we randomly circulate live news related to corruption to users and incorporate a lab experiment into the app system to elicit users’ bribery behavior every week. We find that corruption news involving politicians within a close geographical proximity lowers users’ moral costs against the anti-social bribery act, leading to an increase in the amount of bribes. However, news of accused citizens and officials within the geographic proximity increases their moral cost against bribes and decreases the amount. This suggests that individually tailored local information on corruption may be an effective tool to reduce citizens’ supply of bribes.

In the prevailing e-commerce environment, conditional rebates have emerged as a common business practice on leading online platforms such as Taobao. Because rebates are only offered to purchasing consumers who post positive online reviews, a key concern is that it can easily induce fake reviews that might harm consumers. We theoretically analyze the seller’s optimal conditional-rebate strategies based on heterogeneous consumers’ online-review-posting behavior and derive three practically important findings. First, it is not always profitable for strategic sellers to pursue the conditional-rebate strategy. Blindly offering incentives may not help achieve the goal of review manipulation. Second, the conditional-rebate strategy does not necessarily result in fake reviews. Fake reviews occur only if consumers’ moral cost is low and the review-posting cost is not too high. Third, under certain conditions, offering conditional rebates can even increase consumer surplus and social welfare. Platform owners or policy designers can help reduce social losses by offering transparent sales information and by appropriately controlling the platform review-posting cost to induce quality reviews. Our study offers new insights into the fake-review phenomenon induced by conditional rebates and sheds new light on the policy debate about whether platforms should completely ban incentivized reviews.

Levitt and List’s (2007) utility function relating to decisions with a moral dimension is adapted to offer insight into the moral costs associated with tax evasion and benefit fraud. Three questions are empirically explored: Are tax evasion and benefit fraud moral equivalents? Does an individual’s ‘moral hinterland’ associate with their intentions to commit fiscal crimes? What is the role of moral cues in informing public policy to reduce fiscal crimes? The econometric evidence employs 2942 questionnaire responses to a 2016 national (UK) survey. This paper contributes to the literature by offering insight into the way moral costs inform perceptions of the intrinsic value of ‘doing the right thing’ thereby offering a richer analysis of fiscal crimes. The account has particular relevance for policy prescriptions that involve aspects of ‘shame’.

Previous research argues that law expresses social values and could, therefore, influence individual behavior independently of enforcement and penalization. Using three laboratory experiments on tax avoidance and evasion, we study how legality affects individuals’ decisions. We find that, without any risk of negative financial consequences, the qualification of tax minimization as illegal versus legal reduces tax minimization considerably. Legislators can thus, in principle, affect subjects’ decisions by defining the borderline between legality and illegality. However, once we introduce potential negative financial consequences, legality does not affect tax minimization. Only if we use moral priming to increase subjects’ moral cost do we again find a legality effect on tax minimization. Overall, this demonstrates the limitations of the expressive function of law. Legality appears to be an important determinant of behavior only if we consider activities with no or low risk of negative financial consequences or if subjects are morally primed.

Expanding unemployment insurance (UI) not only reduces the burden for the unemployed but also the moral cost of layoffs to firms and their managers. Using staggered expansions of UI across US states, we show that expanding UI leads to larger layoffs in firms experiencing negative economic shocks. The effects are stronger in weakly governed and financially unconstrained firms, where managers have greater discretion to avoid moral cost. This study presents moral cost as a novel microeconomic channel through which UI affects layoff decisions, which can compromise its effectiveness as a social insurance program and an automatic stabilizer.

This chapter distinguishes torts from crimes in terms of the moral costs created by crimes, discusses the nature and incidence of these costs and the problems of assigning liability prices to compensate for them, and describes criminal liability as organized vengeance, a means of inflicting visible, proportioned suffering on offenders as compensation for the moral costs imposed by crimes. The ideas of retribution and deterrence are illustrated in the case of competitive market prices, which also separate efficient from inefficient cost imposition through retribution. Criminal entitlements are defined and distinguished from tortious entitlements, and the differences and connections between tort and criminal liability are explored. In seeking punishment that fits the crime in every case, criminal liability also seeks corrective justice, in this context called proportional punishment, rather than absolute deterrence, and through retributive liability pricing effectively encourages crimes whose value to the perpetrator exceeds the moral costs they impose.

Does legality matter? The case of tax avoidance and evasion

In everyday confabulation and rationalisation of behaviour, agents provide sincerely believed explanations of behaviour which are ill-grounded and normally inaccurate. In this paper, I look at the commonalities and differences between confabulations and rationalisations and investigate their moral costs and benefits. Following Summers and Velleman, I argue that both can be beneficial because they constrain future behaviour through self-consistency motivations. However, I then show that the same features that make confabulations and rationalisations beneficial in some cases can also make them morally costly, when behaviour is explained and justified through the endorsement of bad moral principles. I show that these effects are most likely to occur where the central element of confabulation, self-explanation, and the central element of rationalisation, self-justification, coincide.

Immoral behavior often consists of weighing transgression of a moral norm against maximizing personal profits. One important question is to understand why immoral behaviors vary based on who receives specific benefits and what are the neurocomputational mechanisms underlying such moral flexibility. Here, we used model-based functional magnetic resonance imaging to investigate how immoral behaviors change when benefiting oneself or someone else. Participants were presented with offers requiring a tradeoff between a moral cost (i.e. profiting a morally bad cause) and a benefit for either oneself or a charity. Participants were more willing to obtain ill-gotten profits for themselves than for a charity, driven by a devaluation of the moral cost when deciding for their own interests. The subjective value of an immoral offer, computed as a linear summation of the weighed monetary gain and moral cost, recruited the ventromedial prefrontal cortex (PFC) regardless of beneficiaries. Moreover, paralleling the behavioral findings, this region enhanced its functional coupling with mentalizing-related regions while deciding whether to gain morally tainted profits for oneself vs charity. Finally, individual differences in moral preference differentially modulated choice-specific signals in the dorsolateral PFC according to who benefited from the decisions. These findings provide insights for understanding the neurobiological basis of moral flexibility.