An Experimental Analysis of the Effect of Standards on Compliance and Performance
Forthcoming, Regulation & Governance
39 Pages Posted: 19 Dec 2014 Last revised: 29 Sep 2016
Date Written: September 28, 2016
Legal directives, whether laws, regulations, or contractual provisions, can be written along a spectrum of specificity, about which behavioral and legal scholarship present conflicting views. We hypothesized that the combination of specificity and monitoring promotes compliance but harms performance and trust, whereas the combination of specificity and good faith enhances both the informative goal-setting aspects of specificity and people’s sense of commitment. To test these hypotheses, we used a 2x2x2 experimental design in which participants were instructed to edit a document, either with general or detailed instructions, either with a reference to good faith or without it, and either with monitoring or without it. Participants could engage in various levels and kinds of editing, allowing us to measure distinctly both compliance and performance. When participants require information and guidance, as in the case of editing, we found that specificity increases performance relative to the vague standard condition. We discuss the characteristics of the regulatory frameworks in which our findings are especially relevant.
Keywords: Behavioral ethics, Compliance and performance, Standard vs. Rules, Legal design, Specificity
JEL Classification: K19; K42
Suggested Citation: Suggested Citation