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Behavioral Economics and Business Ethics

Picture: iStock

Behavioural economics shows that people act more morally than the model of homo economicus would suggest. Nevertheless, conflicts between morality and economic interests do frequently occur and in many cases they can be resolved with the help of business ethics.

Companies’ pursuit of profit and the legitimate interests of society are not always in harmony. However, constructive solutions to the conflicts which occur can often be found, for example by regulatory intervention on the part of the state (regulatory ethics), by enterprises shouldering more responsibility (corporate ethics), and by individuals behaving more morally (individual morals).

Behavioural economists have demonstrated experimentally that moral behaviour is not the exception. They have discovered systematic deviations from the image of the utility- and profit-maximizing homo economicus: People reward fair, and punish unfair, behaviour, for example, even at a cost to themselves.

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Authors
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Dominik H. Enste

Prof. Dr. Dominik H. Enste

Head of the Research Unit Behavioral Economics and Business Ethics

Tel+49 221 4981-730

Mailenste@iwkoeln.de

@DominikEnste

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Theresa Eyerund

Theresa Eyerund

Economist in the Project Future of Work

Tel+49 221 4981-783

Maileyerund@iwkoeln.de

@TheresaEyerund

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Lena Suling

Lena Suling

Economic Research Consultant of the IW Akademie

Tel+49 221 4981-816

Mailsuling@iwkoeln.de

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Julia Wildner

Julia Wildner

Economic Research Consultant of the IW Akademie

Tel+49 221 4981-818

Mailwildner@iwkoeln.de

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