Monetary Incentives and the Contagion of Unethical Behavior

38 Pages Posted: 18 Mar 2021

See all articles by Benoit Le Maux

Benoit Le Maux

Centre de Recherche en Économie et Management (CREM)

David Masclet

Université de Rennes I; M@rsouin

Sarah Necker

University of Freiburg

Date Written: February 1, 2021

Abstract

We analyze both theoretically and empirically how monetary incentives and information about others’ behavior affect dishonesty. We run a laboratory experiment with 560 participants, each of whom observes a number from one to six with there being a payoff associated with each number. They can either truthfully report the number they see or lie about it in order to increase their payoff. We vary both the size of the payoff (Low, High, and Very High) and the amount of information about others’ dishonesty (With and Without Information). We first find that dishonesty falls in the Very High treatment. Second, while social information has on average at most a weak positive effect, there is a strong effect if the accuracy of individuals’ beliefs is accounted for. Third, social information and payoffs do not interact with each other.

Keywords: Laboratory experiment, theory, cheating, monetary incentives, information on others’ behavior, lying costs.

JEL Classification: C91, D03, D78

Suggested Citation

Le Maux, Benoit and Masclet, David and Necker, Sarah, Monetary Incentives and the Contagion of Unethical Behavior (February 1, 2021). ZEW - Centre for European Economic Research Discussion Paper No. 21-025, Available at SSRN: https://ssrn.com/abstract=3805628 or http://dx.doi.org/10.2139/ssrn.3805628

Benoit Le Maux (Contact Author)

Centre de Recherche en Économie et Management (CREM) ( email )

7 place Hoche
Rennes, Bretagne 35065
France

David Masclet

Université de Rennes I ( email )

11 Rue Jean Macé
35065 Rennes Cedex, Rennes
France

M@rsouin ( email )

France

Sarah Necker

University of Freiburg ( email )

Fahnenbergplatz
Freiburg, D-79085
Germany

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