On the attribution of externalities

Do people blame or praise others for producing negative or positive externalities? The experimental philosopher Knobe conducted a questionnaire study that revealed that people blame others for foreseen negative externalities but do not praise them for foreseen positive ones. We find that the major determinant of the Knobe effect is the relative distribution of economic power among the agents. We confirm the Knobe effect only in situations where the producer of the externality holds the higher economic status and the positive externalities are small. Switching economic power makes the Knobe effect vanish. The Knobe effect is even reversed in settings with large positive externalities. Our results are in line with theoretical predictions by Levine.