This paper investigates the impact of markets on moral reasoning. Whereas the current literature focuses on morally relevant decisions that arise in markets, little is known about whether the exposition to markets shapes subsequent moral reasoning. To close this gap, we run a large-scale online experiment with 3 conditions: In Baseline, participants make a choice in a moral dilemma. In the other two conditions, participants are exposed to either a Non-market or Market environment, before facing the identical choice in the moral dilemma. We hypothesize that being exposed to Market induces cost-benefit considerations, which translate into modified reasoning in the subsequent moral dilemma. Compared to the baseline distribution, we indeed find a substantial effect in Market. However, similar choices can be observed in Non-market. We discuss potential explanations for these results, and suggest avenues for future research.

This paper uncovers a novel mechanism through which pay dispersion can have a negative effect on firm performance, even in the absence of equity or fairness considerations. We use a stylized model of a self-managed work team to show that, when team-work involves heterogeneous tasks, the provision of incentives to exert effort conflicts with the provision of incentives to share information relevant for decision-making. Pay dispersion deteriorates information sharing as it induces workers to conceal "bad news" to maintain their coworkers motivation. The practical implications of our theory are that team empowerment should go hand in hand with pay compression and that empowerment should be avoided when team production involves strongly heterogeneous tasks.

This paper provides a rationale for equal sharing in heterogeneous partnerships. We introduce project choice and information sharing to a standard team production setting. A team with two agents can choose whether they want to work on a status quo project or on an alternative project. If the (expected) quality of the projects is given and common knowledge, it is optimal for team surplus to give a higher share to the more productive agent in order to optimally motivate. If agents have private information, we have to give the higher share of profits to the less productive agent if we want agents to share this information, which would allow for better adaptation. Equal revenuesharing strikes a balance between the two objectives of adaptation and motivation and can be efficient even in the presence of considerable productivity differences across partners.

There is a long ongoing debate on whether interaction in a market influences moral decisions of individuals. While some studies show that individuals tend to decide less morally when being exposed to a market environment, other studies argue that the experience of mar- ket interaction promotes moral behavior. We add to this discussion by distinguishing between two moral concepts: consequentialism and deontology. According to consequentialism, actions are evaluated only by their consequences. Contrary to that, deontology focuses solely on the morality of the action itself. We design an online experiment in order to investigate the e ect of market interaction on moral deci- sion making in a subsequent moral dilemma. Taking into account how markets make cost benefit considerations salient, we hypothesize that individuals are more likely to focus on consequences if they interacted in a market before.