The Ethics of Incentivizing the Uninformed: A Vignette Study
Sandro Ambuehl, Axel Ockenfels
American Economic Review · 2017 · Volume 107 · Issue 5
Abstract
Our recent working paper (Ambuehl, Ockenfels, and Stewart 2017) shows theoretically and experimentally that people with higher costs of information processing respond more to an increase in the incentive for a complex transaction, and decide to participate based on a worse understanding of its consequences. Here, we address the resulting tradeoff between the principle of informed consent and the principle of free contract. Respondents to our vignette study on oocyte donation overwhelmingly favor the former and support policies that require donors to thoroughly understand the transaction. This finding helps design markets that are not only efficient but also considered ethical.
Keywords
Market Design, Search, Learning, Information and Knowledge, Communication, Belief, Unawareness, Economics of Contract: Theory, Health: Government Policy, Regulation, Public Health
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