Why are People Honest? Internal and External Motivations to Report Honestly

53 Pages Posted: 12 May 2017 Last revised: 27 May 2018

See all articles by Pamela R. Murphy

Pamela R. Murphy

Queen's University - Smith School of Business; Queen's University

Michael J. Wynes

Wilfrid Laurier University

Till-Arne Hahn

Queen's University

Patricia Devine

University of Wisconsin - Madison

Multiple version iconThere are 2 versions of this paper

Date Written: March 17, 2017

Abstract

We create and validate measures capturing internal and external motivations to report honestly as individual differences. Both measures have high levels of reliability, as well as convergent and divergent validity. To test their predictive validity, we conduct two experiments. In the first, MTurk participants have the opportunity and incentive to misreport with no immediate consequences, and in the second, participants with management experience report how they would act in a similar business context. We find that participants who are higher in internal motivations to report honestly are, indeed, more likely to report honestly than others. Partial evidence supports that people higher in external motivations report more honestly when we introduce management controls. We also provide evidence of unintended consequences; people who are higher in internal motivations actually misreport more under certain controls than they do absent those controls, consistent with self-determination theory. Results should be of interest to management and those charged with governance or oversight within an organization. Our measures are also useful to researchers investigating honest reporting by allowing them to identify, ex ante, individuals who wish to be honest versus appear honest.

Keywords: honesty, misreporting, scale development, experiment

JEL Classification: M41

Suggested Citation

Murphy, Pamela R. and Wynes, Michael J. and Hahn, Till-Arne and Devine, Patricia, Why are People Honest? Internal and External Motivations to Report Honestly (March 17, 2017). Available at SSRN: https://ssrn.com/abstract=2967548 or http://dx.doi.org/10.2139/ssrn.2967548

Pamela R. Murphy (Contact Author)

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Queen's University ( email )

Kingston, Ontario K7L 3N6
Canada
6135333260 (Phone)

Michael J. Wynes

Wilfrid Laurier University ( email )

75 University Ave W
waterloo, ontario N2L 3C5
Canada

Till-Arne Hahn

Queen's University

Kingston, Ontario K7L 3N6
Canada

Patricia Devine

University of Wisconsin - Madison

716 Langdon Street
Madison, WI 53706-1481
United States

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