Goal-Based Systems and Cheating: Decomposing the Role of Goal Targets, Social Comparison Framing and Financial Pay

44 Pages Posted: 6 Sep 2017 Last revised: 24 Apr 2020

See all articles by Matthew Chao

Matthew Chao

Williams College

Ian Larkin

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: March 6, 2020

Abstract

Research has shown that goal-based incentive systems lead to cheating. However, goal-based systems contain many distinct components, including the assignment of the target, justification of the target through information such as social comparisons, and monetary rewards for meeting the target. Existing research has not decomposed which of these elements induce cheating. We run two experiments to test which elements, either on their own or when used together, lead to cheating. Using a task from previous experiments, Study 1 detects increased cheating (and especially blatant forms of cheating) in response to social comparison framing. Merely assigning a target had no detectable effect unless social comparisons were simultaneously implemented. In Study 2, we pay participants based on performance and equate marginal financial returns to cheating between goal and non-goal conditions. We find that paying for performance increases cheating, but assigning a target again had no detectable effect unless implemented alongside pay for performance. Together, both studies suggest that, while goal-based systems may cause cheating, elements other than goal targets appear to drive this cheating. These results emphasize that incentive systems such as those using goals are inherently complex, and research and incentive system design must carefully consider the underlying components of the system.

Keywords: Goals, social comparisons, cheating, judgment and decision making, incentive systems, ethics

JEL Classification: M50, J33

Suggested Citation

Chao, Matthew and Larkin, Ian, Goal-Based Systems and Cheating: Decomposing the Role of Goal Targets, Social Comparison Framing and Financial Pay (March 6, 2020). Available at SSRN: https://ssrn.com/abstract=3031304 or http://dx.doi.org/10.2139/ssrn.3031304

Matthew Chao

Williams College ( email )

Williamstown, MA 01267
United States

Ian Larkin (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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