Moral Principles as a Deterrent to Embezzlement

Abstract

We utilize a psychological game-theoretical framework and conduct experiments to explore how moral principles shape embezzlement behavior through their influence on beliefs. Our model suggests that embezzlement behavior is affected by two non-monetary factors: the disutility associated with deviating from personal moral principles and social moral principles. We hypothesize that suggestive principles impact behavior by altering personal moral principles, while prohibitive principles primarily affect behavior by modifying social moral principles. Our experimental findings support these hypotheses and unveil gender-specific reactions to the announcement of principles: women's embezzlement behavior is influenced by both announcements, while men's behavior remains unchanged. Furthermore, while both female recipients and dictators anticipate that the prohibitive principle will effectively reduce embezzlement, only male recipients hold this belief, as male dictators show no such expectation.

Keywords: Embezzlement, Experiment, Psychological game-theory, Corruption