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The Choice of Honesty: An Experiment Regarding Heterogeneous Responses to Situational Social Norms

Author

Listed:
  • Rajna GIBSON BRANDON

    (University of Geneva and Swiss Finance Institute)

  • Carmen TANNER

    (University of Zurich)

  • Alexander F. WAGNER

    (University of Zurich and Swiss Finance Institute)

Abstract

We conduct a laboratory experiment in which we expose participants to situational social norms of approval or disapproval of lying. While participants on average conform to the situational pressure, the results highlight important differences in individual reactions. Situational norms crowd out intrinsic preferences for truthfulness; conversely, these preferences support resistance against "bad" norms. The extent and direction of the interaction of individual characteristics with situational norms and with economic incentives shed light on why people act truthfully. Out of several possible explanations, self-signaling under situational pressure provides the most convincing account of the evidence from the experiment.

Suggested Citation

  • Rajna GIBSON BRANDON & Carmen TANNER & Alexander F. WAGNER, 2015. "The Choice of Honesty: An Experiment Regarding Heterogeneous Responses to Situational Social Norms," Swiss Finance Institute Research Paper Series 15-01, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp1501
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    More about this item

    Keywords

    Crowding-out; honesty; norm conformity; protected values; self-signaling; situational social norms.;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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