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Moral Equilibrium

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.

Discussion Questions

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?

Teaching Notes

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.”

Terms defined in our ethics glossary that are related to the video and case studies include: moral emotions, moral equilibrium, rationalizations, and self-serving bias.

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.

Additional Resources

The latest resource from Ethics Unwrapped is a book, Behavioral Ethics in Practice: Why We Sometimes Make the Wrong Decisions, written by Cara Biasucci and Robert Prentice. This accessible book is amply footnoted with behavioral ethics studies and associated research. It also includes suggestions at the end of each chapter for related Ethics Unwrapped videos and case studies. Some instructors use this resource to educate themselves, while others use it in lieu of (or in addition to) a textbook.

Cara Biasucci also recently wrote a chapter on integrating Ethics Unwrapped in higher education, which can be found in the latest edition of Teaching Ethics: Instructional Models, Methods and Modalities for University Studies. The chapter includes examples of how Ethics Unwrapped is used at various universities.

The most recent article written by Cara Biasucci and Robert Prentice describes the basics of behavioral ethics and introduces Ethics Unwrapped videos and supporting materials along with teaching examples. It also includes data on the efficacy of Ethics Unwrapped for improving ethics pedagogy across disciplines. Published in Journal of Business Law and Ethics Pedagogy (Vol. 1, August 2018), it can be downloaded here: “Teaching Behavioral Ethics (Using “Ethics Unwrapped” Videos and Educational Materials).”

An article written by Ethics Unwrapped authors Minette Drumwright, Robert Prentice, and Cara Biasucci introduce key concepts in behavioral ethics and approaches to effective ethics instruction—including sample classroom assignments. Published in the Decision Sciences Journal of Innovative Education, it can be downloaded here: “Behavioral Ethics and Teaching Ethical Decision Making.”

A detailed article written by Robert Prentice, with extensive resources for teaching behavioral ethics, was published in Journal of Legal Studies Education and can be downloaded here: “Teaching Behavioral Ethics.”

Another article by Robert Prentice, discussing how behavioral ethics can improve the ethicality of human decision-making, was published in the Notre Dame Journal of Law, Ethics & Public Policy. It can 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 have 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 some 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 licensing 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 do not 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 was prompted to write about something they did that they were NOT proud of, and the second group was asked to write 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 are feeling especially good about yourself, you are most in danger of giving yourself license to screw up.”


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.