Repugnancy costs

Repugnancy costs are costs borne by an individual or entity as a result of a stimulus that goes against that individual or entity's cultural mores.[1][2][3][4] The cost could be emotional, physical, mental or figurative. The stimulus could be anything from food to people to an idea.

These costs are perspective-dependent and individual. These costs may be different for different groups of people; countries, states, ethnicities, etc.[5] The term allows for a clear and understandable way of representing the concept of contextual stigma in a literal and applicable sense.

Repugnancy costs measure the degree of dislike toward a repugnant market or transaction by appealing to the concept of equalizing differences developed by Adam Smith: What is the minimum compensation that we have to provide to an individual to be willing to allow a repugnant market or transaction?

Origin

Repugnancy costs were first mentioned in a debate between Alvin Roth and Julio Elias on whether there should be an official market for kidneys.[6] The act of buying and selling organs may be against one's cultural mores; it may be repugnant. Hence, this is an additional cost one must bear if such a market was deemed repugnant in the context of one's culture.

In an experimental survey, Elias, Lacetera and Macis (2019) find that preferences for compensation have strong moral foundations; participants in the experiment especially reject direct payments by patients, which they find would violate principles of fairness.[7]

See also

References
  1. Roth, Alvin E. (2007), "Repugnance as a constraint on markets," November, Journal of Economic Perspectives, vol. 21 (3), Summer, pp. 37-58.
  2. Roth, Alvin E. (2007), "What Have We Learned From Market Design?," NBER Working Papers 13530, National Bureau of Economic Research, Inc.
  3. Michael Sandel (April 24, 2012), "What Money Can't Buy: The Moral Limits of Markets," Farrar, Straus and Giroux, ISBN 978-0-374-20303-0
  4. Two new books probe the limits of capitalism July 21st 2012 The Economist
  5. Elias, Julio J. (2008),"The Role of Repugnance in the Development of Markets: The. Case of the Market for Kidneys for Transplants," Working paper.
  6. Elias, Julio J. and Roth, Alvin E. (2007),"Econ One on One: A Market for Kidneys?" The Wall Street Journal Online.
  7. Elías, Julio J., Nicola Lacetera, and Mario Macis. 2019. "Paying for Kidneys? A Randomized Survey and Choice Experiment." American Economic Review, 109 (8): 2855-88.
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