Sandro Ambühl // University of Zurich, Switzerland
To the profileCan Incentives Cause Harm?
Research SeminarsTests of Undue Inducement
Around the world, laws limit incentives for transactions such as human research participation, egg donation, or gestational surrogacy. A key reason is the notion of undue inducement — the conceptually vague and empirically largely untested idea that incentives cause harm by distorting individual decision making. Two experiments, including one based on a highly visceral transaction, show that incentives bias information search. Yet, such behavior is also consistent with Bayes-rational behavior. The paper presented in this research seminar develops a criterion that indicates whether choices admit welfare weights on benefit and harm that justify permitting the transaction but capping incentives. In the authors experimental data, no such weights exist.
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