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Cheating and Loss Aversion: Do People Cheat More to Avoid a Loss?

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  • Gilles Grolleau

    () (LAMETA, SupAgro, UMR 1135, 34060 Montpellier, France; and LESSAC, ESC Dijon, Université Bourgogne Franche-Comté, 21000 Dijon, France)

  • Martin G. Kocher

    () (Department of Economics, University of Munich, D-80539 Munich, Germany; School of Economics and Finance, Queensland University of Technology, 4000 Brisbane, Australia; and Department of Economics, University of Gothenburg, 40530 Gothenburg, Sweden)

  • Angela Sutan

    () (LESSAC, ESC Dijon, Université Bourgogne Franche-Comté, 21000 Dijon, France; and LAMETA, UMR 5474, 34000 Montpellier, France)

Abstract

Does the extent of cheating depend on a proper reference point? We use a real-effort matrix task that implements a two (gain versus loss frame) times two (monitored performance versus unmonitored performance) between-subjects design with 600 experimental participants to examine whether the extent of cheating is reference dependent. Self-reported performance in the unmonitored condition is significantly higher than actual performance in the monitored condition—a clear indication of cheating. However, the level of cheating is by far higher in the loss frame than in the gain frame under no monitoring. The fear of a loss seems to lead to more dishonest behavior than the lure of a gain.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2313 . This paper was accepted by Uri Gneezy, behavioral economics .

Suggested Citation

  • Gilles Grolleau & Martin G. Kocher & Angela Sutan, 2016. "Cheating and Loss Aversion: Do People Cheat More to Avoid a Loss?," Management Science, INFORMS, vol. 62(12), pages 3428-3438, December.
  • Handle: RePEc:inm:ormnsc:v:62:y:2016:i:12:p:3428-3438
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    File URL: http://dx.doi.org/10.1287/mnsc.2015.2313
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Grosch, Kerstin & Rau, Holger, 2017. "Gender differences in honesty: The role of social value orientation," Center for European, Governance and Economic Development Research Discussion Papers 308, University of Goettingen, Department of Economics.
    2. repec:spr:schmbr:v:70:y:2018:i:2:d:10.1007_s41464-017-0041-z is not listed on IDEAS
    3. Sanjit Dhami, 2017. "Human Ethics and Virtues: Rethinking the Homo-Economicus Model," CESifo Working Paper Series 6836, CESifo Group Munich.
    4. Olaf Hübler & Lukas Menkhoff & Ulrich Schmidt, 2018. "Who Is Cheating? The Role of Attendants, Risk Aversion, and Affluence," Discussion Papers of DIW Berlin 1736, DIW Berlin, German Institute for Economic Research.
    5. Ellen Garbarino & Robert Slonim & Marie Villeval, 2016. "Loss Aversion and lying behavior: Theory, estimation and empirical evidence," Working Papers halshs-01404333, HAL.
    6. repec:eee:jeborg:v:137:y:2017:i:c:p:428-444 is not listed on IDEAS
    7. Essl, Andrea & Jaussi, Stefanie, 2017. "Choking under time pressure: The influence of deadline-dependent bonus and malus incentive schemes on performance," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 127-137.
    8. Bortolotti, Stefania & Soraperra, Ivan & Sutter, Matthias & Zoller, Claudia, 2017. "Too Lucky to Be True: Fairness Views under the Shadow of Cheating," IZA Discussion Papers 10877, Institute for the Study of Labor (IZA).
    9. Moreno, Ignacio & Vázquez, Francisco J. & Watt, Richard, 2017. "Rationality and honesty of consumers in insurance decisions," Journal of Economics and Business, Elsevier, vol. 89(C), pages 36-46.
    10. repec:eee:ecolet:v:163:y:2018:i:c:p:46-49 is not listed on IDEAS
    11. François Cochard & Alexandre Flage & Grolleau Gilles & Sutan Angela, 2018. "Are individuals more generous in loss contexts?," Working Papers 2018-02, CRESE.
    12. Stefania Bortolotti & Ivan Soraperra & Matthias Sutter & Claudia Zoller, 2017. "Too Lucky to be True - Fairness Views under the Shadow of Cheating," CESifo Working Paper Series 6563, CESifo Group Munich.

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    Keywords

    cheating; lying; loss aversion; experiment;

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