IDEAS home Printed from https://ideas.repec.org/a/eee/aosoci/v79y2019ics0361368219300650.html
   My bibliography  Save this article

Cheating when in the hole: The case of New York city taxis

Author

Listed:
  • Rajgopal, Shivaram
  • White, Roger

Abstract

We examine the influence of rationalization on NYC taxi drivers’ decisions to cheat their customers. We find that cheating ramps up by an order of magnitude when taxi drivers are in settings where it is easier for them to view cheating as acceptable as opposed to dishonest. This finding provides field evidence support for the idea that self-concept maintenance plays an important role in preventing fraud, and that fraud in economic exchange multiplies when participants can rationalize cheating in a way that precludes it from affecting their self-concept.

Suggested Citation

  • Rajgopal, Shivaram & White, Roger, 2019. "Cheating when in the hole: The case of New York city taxis," Accounting, Organizations and Society, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:aosoci:v:79:y:2019:i:c:s0361368219300650
    DOI: 10.1016/j.aos.2019.101070
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0361368219300650
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.aos.2019.101070?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. Hoffman, Elizabeth & McCabe, Kevin A & Smith, Vernon L, 1998. "Behavioral Foundations of Reciprocity: Experimental Economics and Evolutionary Psychology," Economic Inquiry, Western Economic Association International, vol. 36(3), pages 335-352, July.
    3. Hans Degryse & Steven Ongena, 2005. "Distance, Lending Relationships, and Competition," Journal of Finance, American Finance Association, vol. 60(1), pages 231-266, February.
    4. Loukas Balafoutas & Rudolf Kerschbamer & Matthias Sutter, 2017. "Second‐Degree Moral Hazard In A Real‐World Credence Goods Market," Economic Journal, Royal Economic Society, vol. 127(599), pages 1-18, February.
    5. Orley Ashenfelter & Kirk Doran & Bruce Schaller, 2010. "A Shred of Credible Evidence on the Long‐run Elasticity of Labour Supply," Economica, London School of Economics and Political Science, vol. 77(308), pages 637-650, October.
    6. Colin Camerer & Linda Babcock & George Loewenstein & Richard Thaler, 1997. "Labor Supply of New York City Cabdrivers: One Day at a Time," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 407-441.
    7. Burns, Natasha & Kedia, Simi, 2006. "The impact of performance-based compensation on misreporting," Journal of Financial Economics, Elsevier, vol. 79(1), pages 35-67, January.
    8. Urs Fischbacher & Franziska Föllmi-Heusi, 2013. "Lies In Disguise—An Experimental Study On Cheating," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 525-547, June.
    9. Haß, Lars Helge & Müller, Maximilian A. & Vergauwe, Skrålan, 2015. "Tournament incentives and corporate fraud," Journal of Corporate Finance, Elsevier, vol. 34(C), pages 251-267.
    10. Loukas Balafoutas & Adrian Beck & Rudolf Kerschbamer & Matthias Sutter, 2013. "What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(3), pages 876-891.
    11. Francesca Gino & Lamar Pierce, 2010. "Robin Hood Under the Hood: Wealth-Based Discrimination in Illicit Customer Help," Organization Science, INFORMS, vol. 21(6), pages 1176-1194, December.
    12. Iacus, Stefano & King, Gary & Porro, Giuseppe, 2009. "cem: Software for Coarsened Exact Matching," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 30(i09).
    13. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    14. Efendi, Jap & Srivastava, Anup & Swanson, Edward P., 2007. "Why do corporate managers misstate financial statements? The role of option compensation and other factors," Journal of Financial Economics, Elsevier, vol. 85(3), pages 667-708, September.
    15. Henry Schneider, 2010. "Moral Hazard in Leasing Contracts: Evidence from the New York City Taxi Industry," Journal of Law and Economics, University of Chicago Press, vol. 53(4), pages 783-805.
    16. Patricia M. Dechow & Richard G. Sloan & Amy P. Sweeney, 1996. "Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC," Contemporary Accounting Research, John Wiley & Sons, vol. 13(1), pages 1-36, March.
    17. Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2009. "cem: Coarsened exact matching in Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 524-546, December.
    18. Orley Ashenfelter & Kirk Doran & Bruce Schaller, 2010. "A Shred of Credible Evidence on the Long‐run Elasticity of Labour Supply," Economica, London School of Economics and Political Science, vol. 77(308), pages 637-650, October.
    19. Houser, Daniel & Vetter, Stefan & Winter, Joachim, 2012. "Fairness and cheating," European Economic Review, Elsevier, vol. 56(8), pages 1645-1655.
    20. Wei Shi & Brian L. Connelly & Wm. Gerard Sanders, 2016. "Buying bad behavior: Tournament incentives and securities class action lawsuits," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1354-1378, July.
    21. Henry S. Farber, 2015. "Why you Can’t Find a Taxi in the Rain and Other Labor Supply Lessons from Cab Drivers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1975-2026.
    22. repec:pri:cepsud:199ashenfelter is not listed on IDEAS
    23. Gill, David & Prowse, Victoria & Vlassopoulos, Michael, 2013. "Cheating in the workplace: An experimental study of the impact of bonuses and productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 120-134.
    24. Ayers, Benjamin C. & Ramalingegowda, Santhosh & Eric Yeung, P., 2011. "Hometown advantage: The effects of monitoring institution location on financial reporting discretion," Journal of Accounting and Economics, Elsevier, vol. 52(1), pages 41-61, June.
    25. King, Gary & Zeng, Langche, 2001. "Logistic Regression in Rare Events Data," Political Analysis, Cambridge University Press, vol. 9(2), pages 137-163, January.
    26. C. Kirabo Jackson & Henry S. Schneider, 2011. "Do Social Connections Reduce Moral Hazard? Evidence from the New York City Taxi Industry," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 244-267, July.
    27. Henry S. Farber, 2008. "Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers," American Economic Review, American Economic Association, vol. 98(3), pages 1069-1082, June.
    28. Tyler J. VanderWeele & Ilya Shpitser, 2011. "A New Criterion for Confounder Selection," Biometrics, The International Biometric Society, vol. 67(4), pages 1406-1413, December.
    29. Daniel S. Nagin & James B. Rebitzer & Seth Sanders & Lowell J. Taylor, 2002. "Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment," American Economic Review, American Economic Association, vol. 92(4), pages 850-873, September.
    30. Kajackaite, Agne & Gneezy, Uri, 2017. "Incentives and cheating," Games and Economic Behavior, Elsevier, vol. 102(C), pages 433-444.
    31. Tortia, Ermanno C., 2008. "Worker well-being and perceived fairness: Survey-based findings from Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 2080-2094, October.
    32. Patricia M. Dechow & Weili Ge & Chad R. Larson & Richard G. Sloan, 2011. "Predicting Material Accounting Misstatements," Contemporary Accounting Research, John Wiley & Sons, vol. 28(1), pages 17-82, March.
    33. repec:cup:judgdm:v:12:y:2017:i:1:p:81-89 is not listed on IDEAS
    34. Armstrong, Christopher S. & Larcker, David F. & Ormazabal, Gaizka & Taylor, Daniel J., 2013. "The relation between equity incentives and misreporting: The role of risk-taking incentives," Journal of Financial Economics, Elsevier, vol. 109(2), pages 327-350.
    35. Kareem Haggag & Brian McManus & Giovanni Paci, 2017. "Learning by Driving: Productivity Improvements by New York City Taxi Drivers," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 70-95, January.
    36. Tomz, Michael & King, Gary & Zeng, Langche, 2003. "ReLogit: Rare Events Logistic Regression," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 8(i02).
    37. Ploner, Matteo & Regner, Tobias, 2013. "Self-image and moral balancing: An experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 374-383.
    38. Ethan Cohen-Cole, 2011. "Credit Card Redlining," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 700-713, May.
    39. Bryan K. Church & R. Lynn Hannan & Xi (Jason) Kuang, 2014. "Information Acquisition and Opportunistic Behavior in Managerial Reporting," Contemporary Accounting Research, John Wiley & Sons, vol. 31(2), pages 398-419, June.
    40. Sherrie L. W. Rhine & William H. Greene & Maude Toussaint-Comeau, 2006. "The Importance of Check-Cashing Businesses to the Unbanked: Racial/Ethnic Differences," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 146-157, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Iman Ahmadi, 2023. "Face/Off: The adverse effects of increased competition," Quantitative Marketing and Economics (QME), Springer, vol. 21(2), pages 183-279, June.
    2. Shohfi, Thomas D. & White, Roger M., 2022. "Does native country turmoil predict immigrant workers’ honesty in markets?," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 150-164.
    3. Melanie Millar & Roger M. White & Xin Zheng, 2023. "Substance Abuse and Workplace Fraud: Evidence from Physicians," Journal of Business Ethics, Springer, vol. 183(2), pages 585-602, March.
    4. Silvia Angerer & Daniela Glätzle-Rützler & ChristianWaibel, 2020. "Monitoring institutions in health care markets: Experimental evidence," Working Papers 2020-32, Faculty of Economics and Statistics, Universität Innsbruck.
    5. Silvia Angerer & Daniela Glätzle‐Rützler & Christian Waibel, 2021. "Monitoring institutions in healthcare markets: Experimental evidence," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 951-971, May.
    6. Douthit, Jeremy & Millar, Melanie & White, Roger M., 2021. "Horseshoes, hand grenades, and regulatory enforcement: Close experience with potential sanctions and fraud deterrence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 166(C), pages 137-148.
    7. Uzmanoglu, Cihan, 2022. "The stock market tips," Journal of Empirical Finance, Elsevier, vol. 67(C), pages 271-287.
    8. Kenchington, David G. & Shohfi, Thomas D. & Smith, Jared D. & White, Roger M., 2022. "Do sin tax hikes spur cheating in interpersonal exchange?," Accounting, Organizations and Society, Elsevier, vol. 96(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kenchington, David G. & Shohfi, Thomas D. & Smith, Jared D. & White, Roger M., 2022. "Do sin tax hikes spur cheating in interpersonal exchange?," Accounting, Organizations and Society, Elsevier, vol. 96(C).
    2. Douthit, Jeremy & Millar, Melanie & White, Roger M., 2021. "Horseshoes, hand grenades, and regulatory enforcement: Close experience with potential sanctions and fraud deterrence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 166(C), pages 137-148.
    3. Shohfi, Thomas D. & White, Roger M., 2022. "Does native country turmoil predict immigrant workers’ honesty in markets?," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 150-164.
    4. Marie Claire Villeval, 2019. "Comportements (non) éthiques et stratégies morales," Revue économique, Presses de Sciences-Po, vol. 70(6), pages 1021-1046.
    5. Dan Amiram & Zahn Bozanic & James D. Cox & Quentin Dupont & Jonathan M. Karpoff & Richard Sloan, 2018. "Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature," Review of Accounting Studies, Springer, vol. 23(2), pages 732-783, June.
    6. Eric J. Allen & Patricia M. Dechow & Devin G. Pope & George Wu, 2017. "Reference-Dependent Preferences: Evidence from Marathon Runners," Management Science, INFORMS, vol. 63(6), pages 1657-1672, June.
    7. Alessandro Saia, 2022. "Trouble Underground: Demand Shocks and the Labor Supply Behavior of New York City Taxi Drivers," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 8(1), pages 1-27, March.
    8. Brodeur, Abel & Nield, Kerry, 2018. "An empirical analysis of taxi, Lyft and Uber rides: Evidence from weather shocks in NYC," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 1-16.
    9. Tang, Johnny Jiahao, 2020. "Individual heterogeneity and cultural attitudes in credence goods provision," European Economic Review, Elsevier, vol. 126(C).
    10. Gill, David & Prowse, Victoria & Vlassopoulos, Michael, 2013. "Cheating in the workplace: An experimental study of the impact of bonuses and productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 120-134.
    11. Yingjie Zhang & Beibei Li & Ramayya Krishnan, 2020. "Learning Individual Behavior Using Sensor Data: The Case of Global Positioning System Traces and Taxi Drivers," Information Systems Research, INFORMS, vol. 31(4), pages 1301-1321, December.
    12. Loukas Balafoutas & Rudolf Kerschbamer & Matthias Sutter, 2017. "Second‐Degree Moral Hazard In A Real‐World Credence Goods Market," Economic Journal, Royal Economic Society, vol. 127(599), pages 1-18, February.
    13. Kareem Haggag & Brian McManus & Giovanni Paci, 2017. "Learning by Driving: Productivity Improvements by New York City Taxi Drivers," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 70-95, January.
    14. Nives Della Valle & Matteo Ploner, 2017. "Reacting to Unfairness: Group Identity and Dishonest Behavior," Games, MDPI, vol. 8(3), pages 1-19, July.
    15. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    16. Alem, Yonas & Eggert, Håkan & Kocher, Martin G. & Ruhinduka, Remidius D., 2018. "Why (field) experiments on unethical behavior are important: Comparing stated and revealed behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 156(C), pages 71-85.
    17. Ilona Babenko & Benjamin Bennett & John M Bizjak & Jeffrey L Coles & Jason J Sandvik, 2023. "Clawback Provisions and Firm Risk," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(2), pages 191-239.
    18. Martin, Vincent, 2017. "When to quit: Narrow bracketing and reference dependence in taxi drivers," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 166-187.
    19. Dufwenberg, Martin & Feldman, Paul & Servátka, Maroš & Tarrasó, Jorge & Vadovič, Radovan, 2023. "Honesty in the city," Games and Economic Behavior, Elsevier, vol. 139(C), pages 15-25.
      • Dufwenberg, Martin & Servátka, Maroš & Tarrasó, Jorge & Vadovič, Radovan, 2021. "Honesty in the City," MPRA Paper 106256, University Library of Munich, Germany.
      • Martin Dufwenberg & Paul Feldman & Maros Servatka & Jorge Tarraso & Radovan Vadovic, 2022. "Honesty in the City," Working Papers 2022-03, University of Alaska Anchorage, Department of Economics.
      • Dufwenberg, Martin & Feldman, Paul & Servátka, Maroš & Tarrasó, Jorge & Vadovič, Radovan, 2022. "Honesty in the city," MPRA Paper 115044, University Library of Munich, Germany.
    20. Weiqiang Tan & Jian Zhang, 2021. "Good Days, Bad Days: Stock Market Fluctuation and Taxi Tipping Decisions," Management Science, INFORMS, vol. 67(6), pages 3965-3984, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:aosoci:v:79:y:2019:i:c:s0361368219300650. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/aos .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.