Bringing Ethics into Focus: How Regulatory Focus and Risk Preferences Influence (Un)ethical Behavior

Abstract

In four laboratory studies, we find that regulatory focus induced by situational cues (such as the framing of a task or incentive schemes) influences people’s likelihood to cross ethical boundaries. A promotion focus leads individuals to be more likely to act unethically than a prevention focus (Studies 1, 2, and 3). These higher levels of dishonesty are explained by the influence of a person’s induced regulatory focus on his or her behavior toward risk. A promotion focus leads to risk-seeking behaviors, while a prevention focus leads to risk avoidance (Study 3). Through higher levels of dishonesty, promotion focus also results in higher levels of virtuous behavior (Studies 2 and 3), thus providing evidence for compensatory ethics. Our results also demonstrate that an organization’s framing of ethics influences individuals’ ethical behavior and does so differently depending on an individual’s induced regulatory focus (Study 4).