When we do something good we get to thinking of ourselves as pretty good people, and can then give ourselves license to fail to live up to our own ethical standards. This phenomenon is known as moral equilibrium.
1. Can you explain how the two aspects of moral equilibrium—moral compensation and moral licensing—work?
2. Do you keep a running scoreboard in your head in which you keep track of what sort of a person you are being? Do you notice when you are not living up to your own ethical standards?
3. Can you think of any examples from your life where you engaged in either moral compensation or moral licensing?
4. Oral Suer, the former CEO of the Washington D.C.-area United Way was a tireless worker who raised more than $1 billion for charities over a 30-year career. However, he secretly funneled several hundred thousand dollars of funds raised for other purposes into this own pocket to ‘reward’ himself for all the hard work he had done. What label would you put on Suer’s thinking that led him to decide to act in this way?
5. When are you most vulnerable to moral licensing? How can you guard against being a victim of moral licensing in your own thinking?
6. How can charitable organizations guard against being victimized by moral licensing engaged in by their employees?
Green consumer products, such as organic food, fair trade coffee, or electric cars, represent a fast-growing segment of the consumer market. In the area of organic food alone, data from the Organic Trade Association reveals that consumer demand in the United States has seen double-digit growth every year since 1990. In 2014, the organic food market reached almost $40 billion in sales. Consumers of these products tend to be seen in a more positive light—they are deemed more ethical, more altruistic, and kinder than people who do not buy green products. But is there another side to this kind of consumer behavior?
In a series of experiments comparing consumption of green and “conventional” products, psychologists Nina Mazar and Chen-Bo Zhong demonstrated that those people who bought green products—like eco-friendly laundry detergent or organic yogurt—were less likely to share money with a stranger, more likely to cheat on a task in which they could earn money, and more likely to steal money when they thought they would not get caught. As the psychologists stated, “purchasing green products may license indulgence in self-interested and unethical behaviors.”
Mazar and Zhong, whose study received considerable media attention in their native Canada, as well as in American and British publications, said the results surprised them. Initially, they expected green products to provide a halo effect, whereby the positive impressions associated with green consumption would lead to positive outcomes in other areas. “Given that green products are manifestations of high ethical standards and humanitarian considerations, mere exposure [to them would] activate norms of social responsibility and ethical conduct,” said Mazar and Zhong in an interview.
But as the results indicate, the opposite can be true. “The message of this research is that actions which produce a sense of self content and moral glow can sometimes backfire,” Mazar stated in another interview.
These patterns have been shown to extend to other shopping scenarios. For example, one study tracked scanner data and shopper receipts at a California grocery store. Those shoppers who brought reusable grocery bags with them were more likely to buy environmentally friendly products, like organic food. But they were also more likely to buy indulgent products, like ice cream, cookies, candy, and cake. The researchers followed up this study with a series of experiments that showed these moral licensing effects only happened when the decision to bring the reusable bags was at the shopper’s discretion. When shoppers were told that the store required customers to use cloth bags, licensing effects disappeared and customers chose not to buy indulgent products. Only when consumers felt like using cloth bags was their own idea did the moral licensing effects hold.
1. Beyond green consumption, what other types of products might bring about similar kinds of moral licensing effects? Can you think of instances in your own life when your purchase choices have licensed you to make decisions that were less than ethically ideal? Explain.
2. Do you think these moral licensing effects are common across all kinds of green consumers? Or are there other factors (i.e. demographics, psychographics) that might either exacerbate or weaken the effects? Why or why not?
3. The authors of the study, Mazar and Zhong, initially thought green consumption would have a positive spillover effect and encourage positive behaviors. Why do you think they found the opposite?
4. What steps do you think can be taken to help minimize or mitigate these types of moral licensing effects among green consumers? Explain.
5. If you were the brand manager for a green product, for example an organic food item or an energy-efficient appliance, how would you go about marketing the product knowing these licensing effects were possible?
Organic Market Analysis – Organic Trade Association
Research: Reusable Shopping Bags May Encourage an Unhealthier Diet
How going green may make you mean
Are green consumers more unethical?
When buying in means selling out: Sustainable consumption campaigns and unintended uncivic boomerang effects
This video introduces the behavioral ethics bias known as moral equilibrium. Moral equilibrium describes how, when we do something good, we get to thinking of ourselves as pretty good people, and can then give ourselves license to fail to live up to our own ethical standards.
To learn about related behavioral ethics concepts, watch Self-serving Bias and Being Your Best Self, Part 3: Moral Intent. For a closer look at how moral equilibrium affected the behavior of former lobbyist Jack Abramoff, watch In It to Win: Jack & Moral Equilibrium.
The case study on this page, “Buying Green: Consumer Behavior,” examines how consumers who buy more environmentally-friendly products may give themselves the moral license to also indulge in unhealthy products. For a related case study about how doing good in nonprofit work may lead to misleading behavior, read “Full Disclosure: Manipulating Donors.”
Behavioral ethics draws upon behavioral psychology, cognitive science, evolutionary biology, and related disciplines to determine how and why people make the ethical and unethical decisions that they do. Much behavioral ethics research addresses the question of why good people do bad things. Many behavioral ethics concepts are explored in detail in Concepts Unwrapped, as well as in the video case study In It to Win: The Jack Abramoff Story. Anyone who watches all (or even a good part) of these videos will have a solid introduction to behavioral ethics.
Cain, Daylian M., George Loewenstein, and Don A. Moore. 2005. “The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest.” The Journal of Legal Studies 34 (1): 1-25.
Khan, Uzma, and Ravi Dhar. 2006. “Licensing Effect in Consumer Choice.” Journal of Marketing Research 43 (2): 259-266.
Prentice, Robert A. 2011. “Moral Equilibrium: Stock Brokers and the Limits of Disclosure.” Wisconsin Law Review 2011 (6): 1059-1107.
Sachdeva, Sonya, Rumen Iliev, and Douglas L. Medin. 2009. “Sinning Saints and Saintly Sinners: The Paradox of Moral Self-Regulation.” Psychological Science 20 (4): 523-528.
For resources on teaching behavioral ethics, an article written by Ethics Unwrapped authors Minette Drumwright, Robert Prentice, and Cara Biasucci introduces key concepts in behavioral ethics and approaches to effective ethics instruction—including sample classroom assignments. The article, published in the Decision Sciences Journal of Innovative Education, may be downloaded here: “Behavioral Ethics and Teaching Ethical Decision Making.”
A detailed article by Robert Prentice with extensive resources for teaching behavioral ethics, published in Journal of Legal Studies Education, may be downloaded here: “Teaching Behavioral Ethics.”
An article by Robert Prentice discussing how behavioral ethics can improve the ethicality of human decision-making, published in the Notre Dame Journal of Law, Ethics & Public Policy, may be downloaded here: “Behavioral Ethics: Can It Help Lawyers (And Others) Be their Best Selves?”
A dated but still serviceable introductory article about teaching behavioral ethics can be accessed through Google Scholar by searching: Prentice, Robert A. 2004. “Teaching Ethics, Heuristics, and Biases.” Journal of Business Ethics Education 1 (1): 57-74.
Transcript of Narration
Written and Narrated by
Robert Prentice, J.D.
Business, Government & Society Department
McCombs School of Business
The University of Texas at Austin
“Over the years we’ve all seen high-profile televangelists and “family values” politicians involved in sex scandals. You might have also noticed numerous cases of embezzlement by employees of charitable organizations. How is it that seemingly good people can act so unethically?
One factor is a psychological phenomenon known as moral equilibrium. The basic idea is that most of us want and indeed need to think of ourselves as good people. We keep a sort of running scoreboard in our heads, comparing our mental image of ourselves as good people to our actual behavior.
When we act in ways that don’t live up to our own ethical standards, we tend to feel bad and look for ways to make up for it. So we might do good deeds in order to restore balance to our internal scoreboard. This is called moral compensation.
On the flip side, when we do something good, we add points to the plus side of our mental scoreboard, and we then may give ourselves permission to fail to meet our own ethical standards. This is called moral licensing.
Moral compensation and moral license are the two components of moral equilibrium. Moral licensing is the scary one. It is what allows TV evangelists, family values politicians, and people who work for charities to start telling themselves how wonderful they are, and then to give themselves permission to depart from their own ethical standards. Importantly, these people don’t even realize how their past actions are affecting their current decisions.
One study asked two groups of people to write about themselves. The first group wrote about something they did that they were NOT proud of, and the second group wrote about something they did that they WERE proud of. Afterwards, both groups were asked to donate to charity or to volunteer.
The first group donated more to charity and volunteered more than the second group. The first group – bad deeds fresh in their mind – was engaged in moral compensation. The second group – focused on their own goodness – was practicing moral license.
There are many more studies on moral equilibrium, and they all make the same point: don’t get cocky! Just when you’re feeling especially good about yourself, you’re most in danger of giving yourself license to screw up.”