Fraud Deterrence Institutions Reduce Intrinsic Honesty

Abstract

Deterrence institutions are widely used in modern societies to discourage rule violations but whether they have an impact beyond their immediate scope of application is usually ignored. Using a quasi-experiment with naturally occurring variation in inspections we found evidence of spillover effects across contexts. We identified fraudsters and non-fraudsters on public transport who were or not exposed to ticket inspections by the transport company. We then measured the intrinsic honesty of the same persons in a new, unrelated context where they could misappropriate money. Instead of having an expected educative effect across contexts, the exposure to deterrence practices increased unethical behaviour of fraudsters but also, strikingly, of non-fraudsters, especially when inspection teams were larger. Learning about the prevailing norm is the most likely channel of this spillover effect.

Unethical decision making and sleep restriction: Experimental evidence

“…For example, fatigue management or sleep awareness training, familyfriendly policies, sleep disorder referrals, workplace environment characteristics (e.g., lighting), minimizing shift rotations, or reductions in long hours scheduling are all examples that have been suggested by others as ways to improve sleep health in the workplace (Christian and Ellis, 2011;Barnes, 2011;Redeker et al, 2019), and manager have recognized the value of WHPPs in generating indirect benefits to the company (Downey and Sharp 2007). Importantly, because corporate efforts to improve sleep are unlikely to be seen as focused on workplace ethics concerns, a sleep-focused WHPP would not be predicted to crowd out intrinsic moral motivations, which might be the case with a more overt corporate ethics policy (i.e., a more formal institution designed to increase ethical conduct, as noted in Galeotti et al, 2021).…”

“…The rise in remote work arrangements also implies increased opportunities for worker dishonesty, shirking, or impression management due to decreased monitoring effectiveness and increased anonymity of choice (Corgnet et al, 2015;Dickinson and McEvoy, 2021). How to best manage workplace ethics may not be simple, because the implementation of formal institutions to promote ethical conduct (e.g., monitoring policies, ethical conduct seminars) may have the unintended consequence of crowding out intrinsic honesty (Galeotti et al, 2021).…”

Comportements (non) éthiques et stratégies morales

“…Ils ouvrent à une réflexion politique plus systématique sur l'action sur les croyances, l'incertitude, le dépistage des fausses informations. Ceci est d'autant plus crucial que les instruments classiques issus de la vision beckerienne de la fraude et de la tricherie -l'action sur la probabilité de détection et la sévérité des sanctions -n'ont pas toujours l'efficacité attendue (e.g., Chalfin et McCrary [2017]) et ont même parfois des effets de diffusion inter-contextes négatifs à travers une pression négative sur l'honnêteté intrinsèque (Galeotti et al [2019]).…”

Intrinsic Motivation vs. Corruption? Experimental Evidence on the Performance of Officials

“…Increased control could also lead to an adverse spillover effect, such that officials engage in corruption in areas where this is not punished. Galeotti et al (2021) show such spillovers of crowding-out effects outside the context of corruption. They carry out a quasi-experimental analysis of behavior in public transport.…”