What Good Markets Are Good ForTowards a Moral Justification of Free Markets
C. What Role Do Virtues Play in the Contribution of the Market?
Given what we know about the telos of markets and about human flourishing, the third part of the project (C) investigates what virtues – and on a more aggregate level: what virtue and value patterns and what virtue-inspired institutional arrangements – are required from key market actors to make the positive relationship between markets and human flourishing come through.
In this part and part D of the project we distinguish explicitly between:
- the personal level (i.e., virtuous behavior, or lack thereof, of persons acting in the market, especially managers);
- the intermediate level of business-organizations and the macro-level of governments.
Although the common definitions of virtues focus on human behavior, in this project it is assumed that organizations and governments can as well behave in a virtue-like, or for that matter a vice-like, manner (cf. e.g. the way Acemoglu & Davidson (2010) talk about ‘extractive’ vs. ‘inclusive’ government institutions, in fact implying a ‘virtue-discourse’ on a macro-level).
Two projects are designed to deal with these issues, with the following leading questions:
C1. What can we learn from game theory, behavioral economics and experimental economy about the influence of virtues and vices on market efficiency and human flourishing in a market context?
C2. What can we learn from social psychology and management studies about the impact of virtues and vices, as they become manifest in various styles of leadership, on human flourishing in and through companies?
Methodologies used in this part of the project are:
- Game theory (C1)
- Behavioral economics (C1)
- Critical assessment of state of the art insights in various fields of economics (C1)
- Factor analysis/ Principal Component Analysis (C2)
- Regression analysis (C2)
- Binary logit/probit model (C2)