Moral hypocrisy in economic games—how prosocial behavior is shaped by social expectations

INTRODUCTION Experimental research in behavioral economics has revealed a high degree of prosocial tendencies in human interactions. These results have been interpreted as suggesting a necessary shift from a model of selfish preferences toward social preferences—the assumption that people intrinsically are concerned about others’ well-being (e.g., Fehr and Schmidt, 1999; Bolton and Ockenfels, 2000). In this article, we first introduce research on prosocial behavior from an economics perspective. We then review several studies that invalidate this social preferences hypothesis by demonstrating that prosocial behavior is reduced when behavior is not observable by relevant others and expectations to behave prosocially are lowered. We argue that people primarily pursue self-interest as long as they can retain the appearance of being fair to others and even themselves—an interpretation referred to as moral hypocrisy (Batson, 2011). Further, we highlight implications for research of this assumption. In behavioral economics, prosocial behavior toward strangers has been examined using the Dictator Game (DG) in which two strangers anonymously interact with each other, typically via computers so that they cannot see each other. Classic versions of this game are played under perfect information, meaning that both players are informed about the rules and the possible actions each player may take. One person is randomly assigned the role of the dictator and the other person the role of the recipient. Dictators get an initial $10 and are given the opportunity to decide how much money they want to hand over to the recipient. Recipients, in contrast, begin the game without any initial endowment and cannot influence their final payoff. Clearly, a selfish dictator would keep everything. However, a meta-analysis by Engel (2011) covering 41,433 single DGs shows that on average, people give about 28.35% of their endowment to the other person and 17% of the dictators give half of it. Henrich et al. (2004) confirmed these findings in cross-cultural studies. Similar cooperative tendencies are found in other economic games like the Ultimatum Game, the Third Party Punishment Game and the Public Good Game (Camerer, 2003). Behavioral economists have tried to explain this kind of prosocial behavior by assuming that people have social preferences. Some of their models suggest that people are intrinsically motivated to reach fair distributive outcomes (cf. Fehr and Schmidt, 2006). Fehr and Schmidt (1999), for instance, assume that people are inequity averse and therefore try to minimize the difference between distributional outcomes. Even though these models are successful in explaining a large amount of data, several studies seem to question their underlying assumption. These studies add a more psychological angle by subtly modifying economic games in a way that manipulate participants’ beliefs about what behavior others might expect from them.