Common sense morality follows – in many cases – the prescriptions of threshold deontology. Governments, for example, are expected to follow their own rules, but in the face of an extreme price increase, public opinion has often supported changing the rules ex post to increase tax revenues. Such moral license in extreme situations is puzzling from a philosophical and an economic point of view. We present a simple contractualist solution to this puzzle using a game-theoretic model. We argue that allowing for deviations from the social contract in extreme circumstances is a necessary condition for the stability of any social contract.
