Finding Partners in Crime? How Internal Transparency Affects Employee Collusion

50 Pages Posted: 27 Jul 2017 Last revised: 2 Feb 2018

See all articles by Victor S. Maas

Victor S. Maas

University of Amsterdam - Amsterdam Business School

Huaxiang Yin

Nanyang Technological University; Nanyang Technological University

Date Written: January 15, 2018

Abstract

Using a lab experiment, we investigate how internal transparency affects the tendency of employees to initiate collusive efforts with colleagues from other departments in an organization. Building on behavioral economics theory, we argue that employees who are treated unkindly by their managers are more willing to collude. We hypothesize that internal transparency affects collusion in two ways. First, by revealing how employees are treated by their managers, transparency affects the probability that specific individuals are approached by colleagues as potential “partners in crime.” Second, increasing transparency incentivizes managers to treat employees better, which in turn reduces employees’ motivation to initiate collusive agreements. The results of the experiment generally support the theory and have several implications for research and practice.

Keywords: Anticipation of reciprocity; Collusion; Internal transparency; Reciprocity

JEL Classification: C91, D83, M40, M50

Suggested Citation

Maas, Victor S. and Yin, Huaxiang and Yin, Huaxiang, Finding Partners in Crime? How Internal Transparency Affects Employee Collusion (January 15, 2018). AAA 2018 Management Accounting Section (MAS) Meeting, Available at SSRN: https://ssrn.com/abstract=3008574 or http://dx.doi.org/10.2139/ssrn.3008574

Victor S. Maas (Contact Author)

University of Amsterdam - Amsterdam Business School ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

Huaxiang Yin

Nanyang Technological University ( email )

Nanyang Business School
Singapore, 639798
Singapore

Nanyang Technological University ( email )

S3-B1C-105, Nanyang Business School
Nanyang Technological University
Singapore, DC Singapore 639798
Singapore

HOME PAGE: http://www.nanyangbusinessschool.ntu.edu.sg/sprsv20/inter/MyProfileDetails.asp

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