We test the importance of social norms for market interactions associated with negative real-world externalities in a large-scale experiment with a heterogeneous population sample from Germany. The majority of experimental participants refuses to trade, thus behaving in a moral way. Our data suggest the importance of norm conformity for the decision to trade as a significant share of buyers and sellers condition market entry on the decisions of others. Moreover, a majority of observers is willing to incur personal costs to sanction trading. Moral behavior is significantly linked to demographic characteristics and stated preferences and attitudes of the participants.
Riehm, Tobias, Nicolas Fugger, Philippe Gillen, Vitali Gretschko and Peter Werner (2021), Social Norms and Market Behavior – Evidence From a Large Population Sample, ZEW Discussion Paper No. 21-017, Mannheim.