Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat

37 Pages Posted: 28 Jan 2013 Last revised: 30 Aug 2013

See all articles by Leslie K. John

Leslie K. John

Harvard Business School

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Scott Rick

University of Michigan, Stephen M. Ross School of Business

Date Written: August 9, 2013

Abstract

Intuitively, people should cheat more when cheating is more lucrative, but we find that the effect of performance-based pay-rates on dishonesty depends on how readily people can compare their pay-rate to that of others. In Experiment 1, participants were paid 5 cents or 25 cents per self-reported point in a trivia task, and half were aware that they could have received the alternative pay-rate. Lower pay-rates increased cheating when the prospect of a higher pay-rate was salient. Experiment 2 illustrates that this effect is driven by the ease with which poorly compensated participants can compare their pay to that of others who earn a higher pay-rate. Our results suggest that low pay-rates are, in and of themselves, unlikely to promote dishonesty. Instead, it is the salience of upward social comparisons that encourages the poorly compensated to cheat.

Keywords: dishonesty, decision making, social comparison, fairness, pay secrecy

JEL Classification: C91, D20, D31, J31

Suggested Citation

John, Leslie K. and Loewenstein, George F. and Rick, Scott, Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat (August 9, 2013). Forthcoming, Organizational Behavior and Human Decision Processes. Available at SSRN: https://ssrn.com/abstract=2208139 or http://dx.doi.org/10.2139/ssrn.2208139

Leslie K. John (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

George F. Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States
412-268-8787 (Phone)
412-268-6938 (Fax)

Scott Rick

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

HOME PAGE: http://webuser.bus.umich.edu/srick/

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