MLSE Seminar: Peter Werner

Date: Tuesday, October 8th

Presenter: Peter Werner

Authors: Nicolas Fugger, Philippe Gillen, Vitali Gretschko, Tobias Riehm (all ZEW – Leibniz Centre for European Economic Research Mannheim) and Peter Werner (MPE, UM)

Title: Social Norms and Market Behavior – Evidence from a large population sample

Abstract: We conduct a large-scale market experiment with a representative sample of the German population in which sellers and buyers can engage in profitable trade which, however, destroys a donation for a good cause. Moreover, we test whether buyers and sellers focus on social norms when they decide to trade and to what extent external observers are willing to sanction trading activities. We find that the majority of sellers and buyers act in a moral way by not entering the market at all. The desire for norm conformity seems to be an important driver of market behavior: A substantial share of buyers and sellers condition their market entry on decisions of other traders. Furthermore, the large majority of observers is willing to incur personal costs in order to punish participants who decide to trade. Additional analyses reveal that the some demographic characteristics of the participants are significantly correlated with moral behavior in the present setting.