External Economics Seminar Series - Hande Erkut

Hande Erkut

WZB Berlin Social Science Center 

Title:

Repugnant transactions: The role of agency and severe consequences

Abstract:

Some transactions are restricted or prohibited, although people may want to engage in them (e.g., the sale of human organs, surrogacy, and prostitution). It is not well understood what causes judgments of repugnance. We study two potential reasons: lack of agency of the parties and severe consequences of the transaction. Limited agency arises, e.g., when one party cannot decide freely because she is not able to reject the transaction offered, or a third person takes the decision on her behalf. In a laboratory experiment, we ask spectators whether they want to prohibit a transaction or not. We find that transactions with severe outcomes (listening to a painful tone) are more frequently prohibited than those with mild outcomes (waiting in the laboratory). We also show that lack of agency and severe outcomes reinforce each other, where the combination of both properties leads to prohibition rates of up to 80 percent.