Are All of Our Good Intentions Just Cheap Talk?
Like most of you, I consider myself an honourable member of society: Trustworthy, honest and moral. Yet I don’t always act accordingly — and judging by the magnitude of insurance fraud, tax deception and the illegal downloading of music, films and games, most of you are like me.
One could say that we are hypocritical. However, to standard economists, most of what people say is just cheap talk: It’s meaningless. Only what people is meaningful: Actions speak louder than words. This is what economists call, ‘revealed preferences’, and to an economist, it means that all those who say they care about morality — but then go ahead and engage in various transgressions — don’t really care.
