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Monetary incentives and the contagion of unethical behavior

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  • Le Maux, Benoît
  • Masclet, David
  • Necker, Sarah

Abstract

We analyze both theoretically and empirically how monetary incentives and information about others' behavior affect dishonesty. We run a laboratory experiment with 560 participants, each of whom observes a number from one to six with there being a payoff associated with each number. They can either truthfully report the number they see or lie about it in order to increase their payoff. We vary both the size of the payoff (Low, High, and Very High) and the amount of information about others' dishonesty (With and Without Information). We first find that dishonesty falls in the Very High treatment. Second, while social information has on average at most a weak positive effect, there is a strong effect if the accuracy of individuals' beliefs is accounted for. Third, social information and payoffs do not interact with each other.

Suggested Citation

  • Le Maux, Benoît & Masclet, David & Necker, Sarah, 2021. "Monetary incentives and the contagion of unethical behavior," ZEW Discussion Papers 21-025, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:21025
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    References listed on IDEAS

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    4. Johannes Abeler & Daniele Nosenzo & Collin Raymond, 2019. "Preferences for Truth‐Telling," Econometrica, Econometric Society, vol. 87(4), pages 1115-1153, July.
    5. Balasubramanian, Parasuram & Bennett, Victor M. & Pierce, Lamar, 2017. "The wages of dishonesty: The supply of cheating under high-powered incentives," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 428-444.
    6. Faravelli, Marco & Friesen, Lana & Gangadharan, Lata, 2015. "Selection, tournaments, and dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 110(C), pages 160-175.
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    Cited by:

    1. Chapkovski, Philipp, 2022. "Unintended consequences of corruption indices: an experimental approach," MPRA Paper 112598, University Library of Munich, Germany.
    2. Simon Dato & Eberhard Feess & Petra Nieken, 2022. "Lying in Competitive Environments: A Clean Identification of Behavioral Impacts," CESifo Working Paper Series 9861, CESifo.
    3. Andrea F.M. Martinangeli & Lisa Windsteiger, 2022. "The Propagation of Unethical Behaviours: Cheating Responses to Tax Evasion," CESifo Working Paper Series 10144, CESifo.
    4. Claire Mouminoux, 2023. "Can misfortune lead to dishonesty?," Rationality and Society, , vol. 35(3), pages 293-310, August.

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    More about this item

    Keywords

    Laboratory experiment; theory; cheating; monetary incentives; information on others' behavior; lying costs;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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