Moral Accounting and Real Effort: Experimental Evidence

Individuals who face consecutive decisions may engage in moral accounting - balancing moral consequences of initial decisions through behavior in subsequent decisions. Yet the evidence is mixed and studies vary in whether participants actively make morally questionable decisions or are passively assigned to moral conditions. Our experiment contributes to the literature by contrasting active and passive outcomes in the first stage, implementing a real effort task in the second stage, and developing a game-theoretical model that addresses self-selection and moral accounting. The results demonstrate moral accounting effects only when participants actively choose the morally questionable option in the first stage.