The economic agent is almost by definition considered to be purely self-interested. But even more than this, his utility is defined over what he consumes and in this he is monotonic. We refer to this as being “selfish”. In this paper we investigate the claim that markets make people selfish. We first argue that economic theory allows us to consider economic agents who make choices on the basis of motivations other than just selfishness, for example agents who have other-regarding preferences. In the second part of the paper, we discuss a number of economic experiments that deal with the conditions under which in a market situation other-regarding behaviour does manifest itself. In this context we discuss three aspects, namely competition, the completeness of contracts and the difference between earned money and windfall gains. All these three factors, under particular circumstances seem to contribute to more selfish behaviour. We conclude that earned money and responsibility play a particular role in determining the prevalence of selfish behaviour.
JEL Classification: D10, D31, D64
- economic agent
- other-regarding preferences
- gift exchange game
- earned money vs windfall money
- The economic agent’s motives
- Competition, complete contracts and earned money – do they make the economic agent more selfish?
- Concluding Remarks