Moral Intuition and Breach of Contract
The argument for permitting efficient breach of contract is both difficult to understand and morally counter-intuitive: people should not be allowed to break their promises without penalty. In these studies, subjects read efficient breach cases and answer questions about the moral and financial obligations of the breacher. Results suggest that people consider breach of contract to be morally objectionable, even when the breaching party pays adequate damages. Further studies investigate the differences between breaches to gain vs. breaches to avoid loss, the effects of thorough explanation of the theory of efficient breach, and the effect of a liquidated damages clause.
Punishment and Compensation
This research with Deborah Small at Wharton investigates responses to wrongdoing. Sympathy for the victim of a crime or a tort may elicit the desire to help the victim, or to punish the transgressor, or both. Where punishment is costly, or where the perpetrator does not directly compensate the victim, these urges may conflict with one another.
Divorce Bargaining
Under contemporary no-fault divorce laws, it is impermissible to factor marital misconduct, a highly salient component of many divorces, into decisions about how to allocate joint property between the parties. We hypothesize that the no-fault law is in conflict with a moral intuition that favors punishment for people who break the marriage contract, and that people will be either unwilling or unable to fully ignore marital fault in the context of divorce settlement negotiations. In four web-based experiments, we asked subjects to read vignettes about divorcing couples, and then to rate proposals by each party about how to divide the marital property. We found that subjects rated wrongdoers’ proposals lower than victims’ proposals, even when they were instructed to ignore fault. Some subjects are explicit about their intention to ignore the law, but many subjects take fault into account without awareness that they are doing so. We also asked subjects to take different roles or points of view in assessing the proposals (e.g., the wife, the husband, or an impartial judge) in order to assess the role of self-serving biases in divorce negotiations. When subjects were assessing neutral divorces, scenarios in which the parties had simply grown apart, they showed a clear effect of perspective, rating their own proposals higher than the other party’s proposals. However, when subjects were assessing unilateral-fault divorces, the effect of perspective was even greater, especially for subjects taking the perspective of victims. We conclude that under certain conditions of unilateral fault, the no-fault divorce law may actually increase the likelihood of impasse in divorce negotiations.
Research Interests
