Counteracting dishonesty strategies: A field experiment in life insurance underwriting

Journal of Behavioral Decision Making

10 Pages Posted: 22 Nov 2022

See all articles by Demetris Christodoulou

Demetris Christodoulou

University of Sydney Business School

Doron Samuell

The University of Sydney

Robert Slonim

The University of Sydney

Franziska Tausch

affiliation not provided to SSRN

Date Written: August 30, 2022

Abstract

Individuals often face financial incentives that challenge their desire to behave hon- estly. Strategically making excuses to justify dishonesty allows them to give in to the temptation of financial benefit and retain their moral self-image. In the context of insurance underwriting, the stakes are high, as providing false information or redact- ing information allows customers to reduce premiums. This is particularly true for smoking disclosures that carry great weight in life insurance. We conduct a field study with a large insurance company with the aim of neutralizing justification strate- gies that individuals deploy for reducing the costs of dishonest smoking disclosures to insurers. First, we raise awareness of the negative consequences dishonesty could have on other policy holders to counteract that individuals could attenuate or ignore such adverse consequences. Second, we make salient the pro-social efforts of the insurer to work against a potentially negative perception of the insurance industry that may feed the excuse of insurance companies being deserving of harm. The study presents field evidence that messages containing information about the social conse- quences of one's actions or the pro-social behavior of a second party can influence normative behavior, particularly honesty.

Keywords: disclosure, field experiment, honesty, life insurance, smoking

JEL Classification: C93, G22

Suggested Citation

Christodoulou, Demetris and Samuell, Doron and Slonim, Robert and Tausch, Franziska, Counteracting dishonesty strategies: A field experiment in life insurance underwriting (August 30, 2022). Journal of Behavioral Decision Making, Available at SSRN: https://ssrn.com/abstract=4239220

Demetris Christodoulou (Contact Author)

University of Sydney Business School ( email )

The University of Sydney
Sydney, NSW 2006
Australia

Doron Samuell

The University of Sydney ( email )

University of Sydney
Sydney, 2006
Australia

Robert Slonim

The University of Sydney ( email )

University of Sydney
Sydney, 2006
Australia

Franziska Tausch

affiliation not provided to SSRN ( email )

No Address Available

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