Mean Markets or Kind Commerce

Does market interaction influence morality? We study a particular angle of this classic question theoretically and experimentally. The novelty of our approach is to posit that people are motivated by reciprocity; an urge many argued affects humans. We scrutinize how this shapes interaction in treatments mimicking societies (autarky, barter, and market societies) that differ only as regards whether and how people trade. While many have argued that market interactions make people more selfish, our reciprocity-based theory suggests that market interaction on the contrary induces more pro-sociality. The experimental results are broadly (but not completely) consistent with the theoretical predictions. The results may also shed light on the development of morality and prosocial behavior over time, in particular with respect to episodes in history where the nature of commerce was transformed.