Replication Data for Chapter 2: Markets and socially responsible behavior - Do punishment and religion promote social responsibility in markets?

This study investigates the effect of markets on socially responsible behavior in a
typical Sub-Saharan African country, Ethiopia. In our first experiment, we use a laboratory competitive product market where sellers and buyers, respectively, have the
option to produce and buy a low-cost product with or a high-cost product without a
negative externality. We randomly assign participants to a version of a game framed
as a “market” context or as a “neutral” (non-market) context. We find that, contrary
to the prediction of pure self-interest theory, participants exhibit considerable levels
of socially responsible behavior irrespective of the framed context. We also find evidence that socially responsible behavior is less prevalent in markets compared to
non-market contexts. Further, our experimental results show that regulating mechanisms and culture, such as punishment and religion, play a significant role in promoting socially responsible behavior in markets. In our second experiment, we use
the joy-of-destruction game to test whether the erosion of social responsibility leads
to subsequent anti-social behavior. We find that anti-social behavior is ubiquitous in
environments where socially responsible behavior is eroded, but this does not differ
across the market and non-market contexts. Finally, we look at the welfare effects and
find suggestive evidence that unregulated markets yield lower welfare compared to
regulated markets. These findings emphasize the role of monitoring and sanctioning
in fostering socially responsible behavior, and thus welfare in market contexts.