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Cheating, incentives, and money manipulation

Published online by Cambridge University Press:  14 March 2025

Gary Charness ,
Celia Blanco-Jimenez ,
Lara Ezquerra  and
Ismael Rodriguez-Lara Open the ORCID record for Ismael Rodriguez-Lara [Opens in a new window]
Gary Charness
Affiliation:
Department of Economics, University of California, 2127 North Hall, Santa Barbara 93106-9210, USA
Celia Blanco-Jimenez
Affiliation:
Department of Economics, Royal Holloway University of London, Egham, Surrey TW20 0EX, UK
Lara Ezquerra
Affiliation:
Department of Business Economics, Universitat de les Illes Balears, Ctra. De Valldemossa km 7.5, Ed. Jovellanos, 07122 Palma De Mallorca, Spain
Ismael Rodriguez-Lara*
Affiliation:
Department of Economics, Business School, Hendon Campus, Middlesex University London, The Burroughs, London NW4 4BT, UK Departamento de Teoria e Historia Economica, Universidad de Granada, Campus Cartuja s/n, 18011 Granada, Spain
*
[email protected]; [email protected]
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Abstract

We use different incentive schemes to study truth-telling in a die-roll task when people are asked to reveal the number rolled privately. We find no significant evidence of cheating when there are no financial incentives associated with the reports, but do find evidence of such when the reports determine financial gains or losses (in different treatments). We find no evidence of loss aversion in the standard case in which subjects receive their earnings in a sealed envelope at the end of the session. When subjects manipulate the possible earnings, we find evidence of less cheating, particularly in the loss setting; in fact, there is no significant difference in behavior between the non-incentivized case and the loss setting with money manipulation. We interpret our findings in terms of the moral cost of cheating and differences in the perceived trust and beliefs in the gain and the loss frames.

Keywords

CheatingLyingIncentivesLoss aversionFramingExperiment

JEL classification

A13: Relation of Economics to Social Values B49: Other C91: Laboratory, Individual Behavior D91: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ D82: Asymmetric and Private Information • Mechanism Design
Type
Original Paper
Information
Experimental Economics , Volume 22 , Issue 1 , 15 March 2019 , pp. 155 - 177
Copyright
Copyright © 2018 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-018-9584-1) contains supplementary material, which is available to authorized users.

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