Research Grants

Research Grants

Apart from the Edmond J. Safra Center for Ethics annual Fellows Academic Program, its diversified research groups and international conferences, and further academic activities supported by the Center, the research of the intersection of ethics, law and markets is also encouraged by the Center by offering generous research grants, on a competitive basis, to senior faculty members at Tel Aviv University from all disciplines and fields.

The grants, offered for a period of one year (in some cases, extension for one additional year is possible), are intended to fund an original research project culminating in an academic publication (article or book). A grant can be used to employ research assistants and/or to finance other research expenses, but cannot be used to finance travel abroad, invite guests or organize conferences.

 

Grant Winners 2019-20:

"To Thine Own Self be True!": The Path to Work Power through Authenticity and Morality


Daniel Heller

What leads to upward mobility in labor markets and makes people rise to power? Is being true to the inner-self an effective strategy to achieve and maintain power, or rather should the powerful disguise their true selves? Given the importance of upward mobility in labor markets, in this research we test whether authenticity–defined as the degree to which individuals connect with and act upon their true selves–leads perceivers to accord more power. Because authenticity is considered a virtue reflecting the moral inner-self, we further examine if the effect of authenticity on power affordance is due to its perceived morality. Extending previous research on antecedents of power affordance, we propose authenticity as a novel path to organizational power that can benefit even those with limited resources.

Our work offers a novel path to power and extends prior work on the political dynamics of power affordance and specifically on the role of moral behavior in upward mobility in labor markets. Practically, the results will suggest whether or not managers and employees should follow Polonius's advice: "To Thine Own Self be True".

 

The Corporation as a Regulatory Concept:From the Private Corporation to Global Value Chains


Doreen Lustig

The past two decades have witnessed a series of technological developments that enabled the emergence of the “sharing economy” – online platforms that promote the sharing of goods, services, resources and talents among users through the Internet. This project focuses on peer-to-peer market platforms in which consumers pay to access goods and services for a period of time – like peer-to-peer financing (e.g. Prosper, Zopa), product markets (eBay) and short-term accommodations (e.g. AirBnB, Homeway). Whereas the emerging sharing economy enables more appealing and more ethical consumption options, as well as the creation of collaborative web communities, an emerging body of literature suggests that disparities in peer-to-peer online markets are significant in magnitude and implications. Yet, while this emerging body of literature is able to show that women and Black sellers and hosts are disadvantaged in peer-to-peer online markets, the data could not answer the question of why and how such disadvantages are obtained and whether they are similar in magnitude and causes to discrimination in other off-line markets. This project empirically investigates inequality and discrimination in the sharing economy and, as a result contributes to our understanding of the ways in which the cyber system should be regulated.

 

Outsourcing moral judgment to the law: implications for consumer behavior


Elinor Amit

Is there a market for being an ethically good company? And what is the price paid by companies for ethical transgressions? A large body of research shows that practices such as cause related marketing, which highlights social responsibility actions taken by the company (CRM; Varandarajan and Menon, 1988), are being rewarded by consumers, whereas unethical behavior meets dissatisfaction (e.g., Ingram, Skinner, & Taylor, 2005). While those observations are certainly true, they explain only part of the variance in consumer’s moral judgments. In the proposed research I argue that a crucial factor dominates consumer’s moral judgments: the legal status of action taken by a company. In particular, while consumers are perfectly capable of conducting moral reasoning (e.g., Bazerman & Gino, 2012; Greene et al., 2001), they substitute this reasoning with outsourcing moral judgment to the law whenever possible. For example, when asked whether it is wrong for doctors to accept money from pharmaceutical companies, consumers judge instead whether it is legal. This is because of a basic feature of human cognition: the tendency to rely on “communities of knowledge” (Sloman & Fernbach, 2017). In the proposed project I will use behavioral experiments to extend these preliminary findings and empirically examine the circumstances under which consumers outsource their moral judgment to the law; understand why they outsource their moral judgment; investigate the implications of moral outsourcing to consumer behavior; and identify exceptions to this rule. The proposed research sheds light on the role of the law in shaping people’s moral perceptions. Moreover, it suggests a surprising and ironic role for the law, of diminishing consumer’s independent, critical thinking. While illegal behaviors are being degraded to being ‘immoral’ even when having positive consequences, legal behaviors are being elevated to being ‘moral’ even when having terrible consequences. The proposed project has several important implications. First, it advances the understanding of the law’s role in whitewashing negative or even dangerous-but-legal practices of companies (i.e., a class of actions that can be collectively defined as institutional corruption; Amit, Koralnik, Posten, Muethel, & Lessig, 2017). Second, it suggests that in order to shape public’s moral perceptions of practices, it is not enough to portray these actions as negative, and highlights the importance of formal regulations as means of shaping moral perceptions. Finally, it emphasizes the need to develop supplementary moral authority sources of knowledge for industries.

 

What Matters to Investors? An Empirical Analysis of Investors' Ethical and Social Preferences”


Kobi Kastiel

There has been a longstanding, heated debate in corporate governance regarding the purpose of the corporation. On one side of this debate stand those who believe that the sole purpose of the corporation is to maximize value for its shareholders. In an enormously influential 1970 article, the economist and Nobel Laureate Milton Friedman set off the intellectual foundation for this view, known as the shareholder primacy approach, arguing that public companies should focus on maximizing their profits and leave the responsibility of addressing societal or ethical objectives, with no or limited connection to shareholder value, to the government or philanthropists.

On the other side of the debate stand those who believe that corporations should think beyond shareholders, and share a fundamental commitment to all stakeholders who contribute to the success of the corporation, including employees, customers, suppliers, and the community at large. According to this approach, known as the stakeholder approach, by taking a broader, more complete view of corporate purpose, companies can focus on creating long-term value, better serving all of their stakeholders. It has also been argued that shareholders themselves have other social preferences, and therefore maximizing shareholder welfare necessitates the corporation’s pursuit of these social preferences.

In this project, I intend to shed new light on this important debate by providing a comprehensive empirical analysis of the ethical and social preferences of public investors. By constructing a rich setting that includes a wide range of business decisions and different types of investors, the project will examine under what circumstances and to what extent public investors are willing to compromise their profits in order to maximize other social and ethical values. Finally, the project will also examine the considerable policy implications that arise from its empirical findings

 

 

Grants winners 2018-19:

Inequality and Discrimination in the Sharing Economy


Tamar Kricheli-Katz and Tali Regev

The past two decades have witnessed a series of technological developments that enabled the emergence of the “sharing economy” – online platforms that promote the sharing of goods, services, resources and talents among users through the Internet. This project focuses on peer-to-peer market platforms in which consumers pay to access goods and services for a period of time – like peer-to-peer financing (e.g. Prosper, Zopa), product markets (eBay) and short-term accommodations (e.g. AirBnB, Homeway). Whereas the emerging sharing economy enables more appealing and more ethical consumption options, as well as the creation of collaborative web communities, an emerging body of literature suggests that disparities in peer-to-peer online markets are significant in magnitude and implications. Yet, while this emerging body of literature is able to show that women and Black sellers and hosts are disadvantaged in peer-to-peer online markets, the data could not answer the question of why and how such disadvantages are obtained and whether they are similar in magnitude and causes to discrimination in other off-line markets. This project empirically investigates inequality and discrimination in the sharing economy and, as a result contributes to our understanding of the ways in which the cyber system should be regulated.

 

Sources and Implications of Fraudulent Behaviors - The Impact of Product Recalls on the Secondary Market: Evidence from Dieselgate


Itai Ater and Nir Yoseph, PhD candidate

We examine the effects of Volkswagen’s emissions scandal (“Dieselgate”) on the secondary car market in Israel. Using administrative data on all car transactions in Israel, we measure the scandal’s effect on the number and the composition of transactions involving used vehicles made by the Volkswagen Group. We also use data from the leading classified ad website and measure the effect of the scandal on the resale price of used Volkswagen vehicles. According to our findings, the Volkswagen emissions scandal had a statistically significant negative effect on the number of transactions involving vehicles made by Volkswagen (nearly -18.0%) and on their resale price (nearly -6.0%). We also find that the reduction in the number of transactions was driven mostly by private sellers and that non-private sellers barely shied away from the market. 

 

Constitutional Infrastructures


Doreen Lustig

While American constitutional historians have dealt with the relationship between the post-1929 administrative state and constitutional processes, the relationship between these public law elements play little to no role in comparative constitutional studies. To what extent were ideas about constitutional judicial review related to or conceived in conjunction with the political and economic circumstances of the interwar period (rather than the postwar period)? How were they related to policy reform and economic thought in the context of welfare and antitrust? Perhaps it is worthwhile considering how the impetus to thinking about these regulatory elements came about simultaneously with the adoption of constitutional judicial review (though I am well aware I may find that they were not consciously related in their time of origin). If related, albeit implicitly or even merely incidentally, in what ways could these elements be understood as constitutive of one another or in tension with one another.

The conceptual facet of this project will draw on the history of ideas and will attempt to rethink the building blocks of our contemporary constitutional theory, especially in the context of checks and balances/separation of powers. Against the grain of a ‘divorced’ understanding between welfare, antitrust and judicial review, this project seeks to unravel the story about the emergence of legal reforms that sought to redefine market/state relations as related and in fact in conjunction with other constitutional processes such as the rise of constitutional judicial review. By seeking to understand the historical relations between the emergences of these intellectual traditions and policy trajectories I wish to explore the possibility or retrieve a lost vision that may be useful for contemporary constitutional legal thought.

 

Ethical Dilemmas in Israeli Class Action Litigation


Alon Klement

The class action is a unique procedure. Unlike an individual lawsuit, which is filed by a plaintiff who then makes the main litigation decisions, a class action is initiated and controlled by the class attorney. In many class actions, it is the attorney who identifies the cause of action, selects the representative plaintiff, and decides how to litigate, whether to settle and for how much.

The class action thus raises unique ethical dilemmas which span the relationships between the attorney and the representative plaintiff, between the attorney and the represented class, among class members, and between them and the representative plaintiff. In addition, the class action implicates questions regarding the attorney’s duties to the court and the defendant, questions that are, by and large, absent in ordinary litigation. 

Despite the increasing surge of class action filings since the enactment of the Class Action Law in 2006, there is almost no discussion of these ethical issues in Israeli literature, and their consideration by the courts is rare. Also, the Israeli bar’s professional code of ethics has not been adjusted for the specific concerns raised by class actions, and it does not address many of their distinctive features.

The proposed research will examine these issues from a broad and comprehensive perspective, addressing the specific characteristics of the legal profession, the significant role of entrepreneurial lawyering in class actions, and the unique features and objectives of the class action procedure. One of the goals of the proposed research is to construct a professional code of ethics that would guide class attorneys’ conduct, realize the goals of class actions and minimize their inherent problems and costs.

 

The New Information Age: Experience and Regulation


Talia Fisher and Roy Kreitner

Current developments in information technology, and especially the widespread transformation of information into data, suggest that we are on the cusp of a new historical epoch. On the one hand, algorithms allow the individual an expanded range of choice, revealing “preferences” that the individual herself could not have been aware of on her own; these revelations in turn may form the basis of new connections, deepened interests and emotional investments, or in short, new identities. In this sense, data analysis contributes to a qualitative jump in the experience of information, in line with the movement of modernity. On the other hand, algorithmic individualization – in personalized medicine, in the tailoring of consumer supply to data-revealed tastes (channeling, and perhaps manufacturing demand), in the cabining of options on offer – is indeed a heightened individualization, but one that makes choice redundant. The individual becomes a data set uniquely pointing to certain outcomes; the individual might be called on to affirm or reject (to click or not to click), but the process of forming preferences has been qualitatively altered.

Many aspects of the issues raised here have been studied, but we aim to offer a consolidation of fields that will offer new insight. Our ambition is to transcend the disciplinary boundaries that typically limit academic appreciation of the big picture by merging historical, economic, institutional and normative perspectives.

The registers of experience and control never exist in isolation; their relationship is not mechanical, but also not so mysterious that it cannot be accounted for. We hope to generate an analytic framework that can make sense of the interplay between these two registers, using historical ideal types as a rough guide. We intend to pursue the research in two tiers. The first tier comprises field level analyses of new information technologies, and runs in two directions. First, the impact of technologies on the use, organization and control of information, especially the transformation of information into analyzable and marketable data. This aspect of the research deals with institutional change, and focuses on the legal and regulatory realms; second, the impact of technologies on the lived experience of information by individuals. The culmination of the first tier of the research will be an account of the dynamic interaction between these two aspects – explaining how institutional change and the experience of information feed into one another.

The second tier of the research is geared toward normative assessment. The initial steps toward such assessment are historical and analytical. They will provide a synoptic overview illuminating the risks and opportunities that changes in the experience and control of information present. Because we see that situation as a critical juncture, as possibly a moment of the constitution of a genuinely new phase in history, the normative inquiry is far-reaching and open-ended. It may alter not simply the way we view the relationship between technology and information, but also our most basic sense of the nature and value of individuality, of choice, of markets, of communal interaction, and of politics.

 

The double Edge Regulation of the Hebrew Word - Hebrew Books Market Management in the Post-Incunable Era, Between Papal and Jewish Law


Maoz Kahana

The Proposed study asks to tie the evolving field of “The History of the Book”, which deals with textual knowledge and its production, with the historical-phenomenological research concerning the religious law, state law and regulation, and their attitude towards the ethics of knowledge transmission. This cultural interjunction takes place in a historical context which characterized by a technological shift, economical pressure and political tension between coexisting societies, namely: A Jewish minority society and a Christian majority society.

The mid-fifteenth century’s invention of the printing press by Johannes Gutenberg lead to the development of a new sixteenth century book market. The new market was highly competitive, full of technological innovations, literary thefts and industrial espionages. The wild market was soon to take a serious percentage of the income of some major European cities and to be answered by a branched regulation of printing permissions, developed system of censorship and unprecedented copyrights laws.

The Hebrew books market was working under the tension created by two parallel, sometime contradictory, systems of law. The first one was the Papal law, who aimed to control the Jewish minority as citizens of lower status. This status had a complicated nature, while the Jewish literature was considered as a threat for the Christian majority, a threat that was emphasized by the historical overtones of the mutual Jewish-Christian tradition. The Papal law limited the possibility to publish Hebrew books and gave the permission to publish only to certain publishers. The other system is the partly independent Jewish Halakhic legal system, to whom the workers and the customers of the Hebrew book industry belonged. Jewish workers, readers and scholars turned to this system in order to regularize the production of problematic books, or to legalize the copyright of certain book or edition for limited period. The fact that the Jewish books market was subject to two parallel and sometime contradictory systems of law, in a time both of those, themselves stood in the middle of deep process of change, created a dynamic feedback effect, full of ups and downs.

This project will describe the complicated ethical perceptions regarding knowledge production and their regulative expressions in both legal systems and the way in which those parallel systems created close relationships, where one was built on the top of the other and while the other was using the lacunae created by the first. This research will be built upon a careful, historical investigation and legal-ethical description of certain case studies in which those both systems were put in motion, parallelly, even if not necessarily in a harmonious way. The expected result is a thicker, historical. ethical and cultural description of the way in which in this historical turning point to modernity, Jewish book market and its ethics were formed and designed.

 

 

 

Grants winners 2017-18:

Can Discrimination be Ethical?


Ronen Avraham

In this research project, we explore the ethical limits of an unobserved before type of discrimination which we (temporarily) call: beneficial statistical discrimination (BSD). Under this practice, a rational agent pursues her own self-interest by statistically discriminating against a disadvantaged group. The unique feature of BSD is that the targeted group also benefits from the practice. Should such practice be allowed? Should it be encouraged or even required? What role should the victim-group’s consent to such a practice play?

     While there is voluminous literature, written by lawyers, philosophers, economists and other public policy makers on intentional discrimination, statistical discrimination and affirmative action, to the best of our knowledge there is no literature on BSD. This project will fill this gap by a) developing a rational choice model of beneficial statistical discrimination, and b) analyzing  its ethical and social desirability.

      The research project is expected to make several contributions. It shall contribute to our normative understanding of the ethics of discrimination and consent, to the economic literature on statistical discrimination as well as to the doctrinal analysis of various legal practices, especially in torts and insurance. The project will last a year and will include both economic modeling and philosophical inquiry. The output is a 25,000 words paper in English. 

     To have a better grasp of the problem, consider the following example; suppose black neighborhoods cannot attract doctors because they cannot compensate the doctors enough for their high value medical services. Because doctors on average confer more benefits than harm, the black neighborhoods are very interested in their services. As a result, they attempt to attract doctors by offering them lower risks of malpractice suits. An OBGYN who makes $300,000 a year but has to pay $150,000 liability insurance might feel incentivized to work in a black neighborhood where she makes only $200,000 but her insurance premium is just $20,000 due to a lower standard of care. As before, the blacks themselves might be better off – without a reduction in the standard of care they will get no OBGYN at all. Should the law allow such transactions?

 

Public attitudes toward the manipulation of behavior for the overall benefit of society


Ayala Arad and Ariel Rubinstein

In this project, we intend to experimentally analyze a policy question of major importance: Are people interested only in the consequences of government policy or do they also care  about the methods by which the consequences are achieved? Do people object government interventions that use psychological manipulations to alter their behavior even if they fully agree with the goals of those interventions? Is the opposition to such interventions strong enough that they are prepared to take actions not in their best interests in order to express that opposition? Do individuals prefer interventions that are less manipulative even at the expense of their effectiveness?

     The project is related to the recent debate in academic circles regarding the type of intervention currently referred to as “nudges”, which have recently become popular in many Western countries.

 

 

 

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