Gender Differences in Dishonesty Disappear When Leaders Make Decisions on Behalf of Their Team

Leaders often face a dilemma between ethical considerations and financial gains. We experimentally study such a dilemma where leaders can benefit their teams at the expense of moral costs. Given the question whether gender diversity in leadership can enhance ethical behavior, our study focuses on examining potential gender differences. Specifically, we analyze the stability of individual dishonesty preferences after subjects assume leadership roles and have to make reporting decisions on behalf of their team. In our lab experiment, we measure, first, individual dishonesty preferences and, second, leaders' reporting decisions for a team by using outcome-reporting games. We focus on an endogenous leadership setting, where subjects can apply for leadership. Women have less pronounced dishonesty preferences than men, but increase dishonesty as leaders. The increase disappears when the promotion procedure changes and leadership is randomly assigned. A follow-up study reveals that women leaders behave dishonestly when they believe their team members prefer dishonesty.