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How Absolute and Relative Payoffs Shape Dishonesty

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  • Sarah Necker

  • Benoit Le Maux

Abstract

We examine how absolute and relative gains within reward schemes influence dishonesty. In our online experiment, we vary two payoff dimensions in a cheating mind game: the payoff level and the absolute payoff difference between being successful or not. A higher payoff level has a negative impact on dishonesty, while a greater absolute payoff difference has a positive impact. Variations in these dimensions also affect the relative payoff difference: we observe the largest decrease in dishonesty when moving from the highest to the lowest relative gain. A potential implication is that reward schemes with a reasonable amount from low performance and a relatively small bonus from high performance are least prone to cheating, and this can be achieved in a cost-neutral way.

Suggested Citation

  • Sarah Necker & Benoit Le Maux, 2026. "How Absolute and Relative Payoffs Shape Dishonesty," CESifo Working Paper Series 12481, CESifo.
    • Handle: RePEc:ces:ceswps:_12481
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    References listed on IDEAS

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    5. Le Maux, Benoît & Necker, Sarah, 2023. "Honesty nudges: Effect varies with content but not with timing," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 433-456.
    6. 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.
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    8. Benoît Le Maux & David Masclet & Sarah Necker, 2024. "Monetary incentives and the contagion of unethical behavior," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 10(2), pages 213-231, December.
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    Keywords

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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