The impact of ethical feedback on emotions and moral decisions: a labor market experiment

This study explores how feedback influences decision-makers' moral behavior through the mediating role of emotions. We do so by running a labor market experiment in a controlled laboratory setting with incentivized tasks that have a moral component. Our research differentiates between the direct informational effects of feedback and its indirect impact mediated by emotions, offering novel insights into the link between emotions and ethical decision-making. We find that ethical feedback positively influences ethical behavior. Decision-makers set higher wages when they expect to receive feedback from workers. Against expectations, feedback that is displayed publicly has a less positive effect than feedback that is given privately. Emotions play a mediating role in the impact of feedback on decisions. Interestingly, we show that positive emotions resulting from good feedback lead to downward adjustments in wages. We interpret this finding in view of existing theories on the role of emotions in decision making, and suggest further research to examine how deciders think about feedback and how their interpretation of public feedback differs from that of private feedback.