Behavioral Economics and Business Ethics
Picture: iStockBehavioural 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.
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.
