The Setup

Making moral decisions can be a challenging and complex process. First, one must identify the ethical values relevant to the situation. Then consider the potential actions that could be taken and apply different moral principles. Take time to consider others’ opinions and choose an action most consistent with the prescribed moral values.

The Kantian Fairness Principle, Moral Hazard, and the Tragedy of the Commons are three mental models that can help individuals and groups make more moral decisions.

The Approach

• Recognize that folks should be treated fairly and respectfully as a guiding principle for making moral decisions and evaluating actions.
• Analyze situations where individuals are not held accountable for their actions to identify potential risks and consequences.
• Understand circumstances where groups are using a shared resource in a way that is not sustainable. Then develop solutions to prevent resource depletion.

​The Latticework

• Kantian Fairness Tendency is the natural inclination of individuals to treat others fairly and with equal respect regardless of their race, gender, or other factors.
• Moral Hazard is a framework for understanding the potential negative consequences that can arise when individuals or institutions are not held accountable for their actions.
• The Tragedy of the Commons is a concept in economics that refers to the depletion of a shared resource due to individuals acting in their self-interest.

​The Deep Dive​​

Kantian Fairness Tendency​
Humans share a desire for fairness at any cost, and this need can be at odds with systems that work better when they seem less than fair. An example might be seeing a colleague receive a promotion when you know you’ve done as good or better a job. The feeling you have doesn’t consider any other aspects of why they might have received the promotion. As such, it’s easy to ascribe what fairness is for yourself, but deciding it for others is more error-prone. Suppose you are making the rules for a system or redefining one; it’s more important to ensure balanced incentives and rewards than guaranteeing that one person is fairly treated. Regardless of whether an option would make someone better off, humans frequently refuse propositions that seem unfair — misconstruing or confusing how the system works can lead to an unbalanced solution. Keep in mind that a fair system will need to consider the human psyche.

​Moral Hazard​
A person or group who does not have to bear the full responsibility for an action is more likely to behave recklessly. The canonical example is when a corporation is willing to take on more risks because they know their insurance company will have to cover all losses. The concept can help you evaluate whether a person or group has a reason to exhibit riskier behavior because they won’t have to pay for the associated costs that result from it. If they don’t shoulder any costs for their actions, they are much more likely to practice dangerous or careless behavior.

​Tragedy of the Commons​
An individual overuses a shared resource for an immediate gain rather than a group’s long-term preservation, leading to a negative communal outcome. For example, a seaman finds a spot where the fish are plentiful, others hear of the bounty, and soon folks are catching more than can be replenished by the ocean’s ecosystem. After a while, there are no more fish. The individual’s action fails to consider the long-term consequences of their immediate gain. The actions taken are not a cognitive bias where someone is acting irrationally; it’s the opposite. Someone is acting entirely rationally, and that leads to collective ruin. Learning to share resources strategically on long time horizons is essential to maintaining and preserving complex systems.