Ethics: Ethical Decision Making and Behavior

Imagine you are the pilot of a jet fighter and following a plane that has been hijacked and now changed its direction towards a football stadium crowded with thousands of people. If you shoot a missile at the plane you will kill the innocent passengers of the hijacked plane but save the lives of thousands of football spectators. What do you do? And does your judgement change if the prime minister orders you to either do so or let the plane go? Does it have an impact if your family is either in the stadium or in the hijacked plane?

In this course on "Ethical Decision Making and Behavior", you will learn important insights about the ethical behavior of others, but also how you morally act – in business situations as well as in everyday life:

• On a theoretical level, the course provides an economic-psychological approach to understanding ethical decision making by integrating important contributions from economics, psychology and sociology. In particular, we focus on several determinants of ethical behavior and discuss the limitations of actual ethical behavior due to cognitive, motivational and institutional distortions.
• On a practical level, the course focuses on current research in Behavioral Ethics. Using the determinants of ethical behavior as topics for your seminar papers, it will be your task to summarize the relevant literature in experimental economics in this area and to write a literature overview on your topic. As starting point for your literature survey, we distribute seminal readings up-front. Moreover, you will test and experience your own ethical behavior as well as that of your classmates by a classroom experiment.

Although individual ethical decision making is in the center of our discussion in this course, we will extend this perspective by considering ethical behavior also in the context of social interactions:

• First, we consider the personal and situational determinants of ethical decision making, taking the environment in which the individual acts as given. In this part, we follow the literature on behavioral economics that divide overall individual decision making into the judgment and the decision making process.
• Second, we consider ethical decision making in a situation in which the individual is interacting with others. Here, we follow the literature on behavioral economics that discusses the strategic aspects of interdependent ethical decision making.

In this course you will learn several tools relevant not only for this course but for your further studies. These are the psychological concepts of Motivation Theory and Attribution Theory, the economic theories of Normative and Subjective Decision Making as well as insights into the Economics of Information, Contract Theory, Incentive Theory and Game Theory.

• Literature Review
• Experiments
• Presentation

• Experiment: 40%
• Presentation: 40%
• Seminar Paper: 20%
• Class Participation: Tiebreaker