Economics and Ethics

the morality of an action is determined solely (lediglich) by its results (or consequenses)

consequentialism is about the Good (goals)
the Right (rules) is that max. the Good

goals come first, rules to achieve the goals

assosiates morallity with self-interest

people are by nature self-interested

descriptive

people max. utility, or satisfaction, Ui
Ui is a functiononly of one´s own material allocation xi

ex: doing good or avoiding bad: selfish
rescuing a child: selfish

an action is moraly right if and only if it max. one´s self interest or well-being

normative

First welfare theorem of economics: Individuals acting in their own interests in free markets will max. economic welfare
Counterargument: Sometimes my interests are furthered by immoral behavior (neg. externalities)

Egoism is not a moral theory
Cooperation involves a short-term loss for a long.term gain
Feelings:conscience is a ggod thing not a selfish thing (-> econmists exclude feelings)

Poeple often act against their long-term interests
EX: volunteering, giving money, donating a kidney
but still selfish motives: Social apprpval, futuer material benefits

Subjects in one room are paired anonymously with subject in another room

Dictators: receive a sum of money (endowment)

Recipients: receive no endowment

Dictator can share any amount, including nothing, with his/her recipient

Fix or manipulate variables
Single blind anonymity: paired subjects never learn the identity of their counteroart, but experimenter knows, who gives to whom
Double blind anonymity:the experimentor also never learns who made which decisions

Anonymity helps rule out certain explanations of giving