Hostname: page-component-5f56664f6-ldbxw Total loading time: 0 Render date: 2025-05-07T17:03:45.591Z Has data issue: false hasContentIssue false
  • English
  • Français

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]
Get access Rights & Permissions [Opens in a new window]

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

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

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.

References

Abeler, J, Falk, A, Goette, L, & Huffman, D (2011). Reference points and effort provision. The American Economic Review, 101(2), 470–492. 10.1257/aer.101.2.470CrossRefGoogle Scholar
Abeler, J., Nosenzo, D., & Raymond, C. (2016). Preferences for truth-telling: A meta study. Econometrica (forthcoming).Google Scholar
Andreoni, J (1989). Giving with impure altruism: Applications to charity and Ricardian equivalence. Journal of Political Economy, 97(6), 1447–1458. 10.1086/261662CrossRefGoogle Scholar
Andreoni, J (1990). Impure altruism and donations to public goods: A theory of warm-glow giving. The Economic Journal, 100(401), 464–477. 10.2307/2234133CrossRefGoogle Scholar
Battigalli, P, Charness, G, & Dufwenberg, M (2013). Deception: The role of guilt. Journal of Economic Behavior & Organization, 93, 227–232. 10.1016/j.jebo.2013.03.033CrossRefGoogle Scholar
Battigalli, P, & Dufwenberg, M (2007). Guilt in games. The American Economic Review, 97(2), 170–176. 10.1257/aer.97.2.170CrossRefGoogle Scholar
Battigalli, P, & Dufwenberg, M (2009). Dynamic psychological games. Journal of Economic Theory, 144(1), 1–35. 10.1016/j.jet.2008.01.004CrossRefGoogle Scholar
Brooks, RRW, Stremitzer, A, & Tontrup, S (2012). Framing contracts: Why loss framing increases effort. Journal of Institutional and Theoretical Economics, 168(1), 62–82. 10.1628/093245612799440032CrossRefGoogle Scholar
Bucciol, A, & Piovesan, M (2011). Luck or cheating? A field experiment on honesty with children. Journal of Economic Psychology, 32(1), 73–78. 10.1016/j.joep.2010.12.001CrossRefGoogle Scholar
Cadsby, CB, Song, F, & Tapon, F (2010). Are you paying your employees to cheat? An experimental investigation. The BE Journal of Economic Analysis & Policy, 10(1), 1–32.Google Scholar
Cameron, JS, & Miller, DT (2009). Ethical standards in gain versus loss frames, Charlotte, NC: Psychological Perspectives on Ethical Behavior and Decision Making. Information Age Publishing 91–106.Google Scholar
Cameron, J. S., Miller, D., & Monin, B. (2010). Deservingness and unethical behavior in loss and gain frames (Unpublished manuscript).Google Scholar
Campbell, W (1935). A comparative investigation of the behavior of students under an honor system and a proctor system in the same university, Los Angeles: University of Southern California Press.Google Scholar
Cappelen, AW, Sorensen, E, & Tungodden, B (2013). When do we lie?. Journal of Economic Behavior & Organization, 93, 258–265. 10.1016/j.jebo.2013.03.037CrossRefGoogle Scholar
Charness, G (2000). Self-serving cheap talk: A test of Aumann’s conjecture. Games and Economic Behavior, 33(2), 177–194. 10.1006/game.1999.0776CrossRefGoogle Scholar
Charness, G (2000). Responsibility and effort in an experimental labor market. Journal of Economic Behavior & Organization, 42, 375–384. 10.1016/S0167-2681(00)00096-2CrossRefGoogle Scholar
Charness, G, & Dufwenberg, M (2006). Promises and partnership. Econometrica, 74(6), 1579–1601.CrossRefGoogle Scholar
Charness, G, Rustichini, A, & Van de Ven, J (2018). Self-confidence and strategic behavior. Experimental Economics, 21(1), 72–98. 10.1007/s10683-017-9526-3CrossRefGoogle Scholar
Childs, J (2012). Gender differences in lying. Economics Letters, 114(2), 147–149. 10.1016/j.econlet.2011.10.006CrossRefGoogle Scholar
Cohn, A, Fehr, E, & Maréchal, MA (2014). Business culture and dishonesty in the banking industry. Nature, 516, 86–89. 10.1038/nature13977CrossRefGoogle ScholarPubMed
Conrads, J, Irlenbusch, B, Rilke, RM, & Walkowitz, G (2013). Lying and team incentives. Journal of Economic Psychology, 34, 1–7. 10.1016/j.joep.2012.10.011CrossRefGoogle Scholar
Croson, R, Boles, T, & Murnighan, JK (2003). Cheap talk in bargaining experiments: Lying and threats in ultimatum games. Journal of Economic Behavior & Organization, 51(2), 143–159. 10.1016/S0167-2681(02)00092-6CrossRefGoogle Scholar
Dufwenberg, M. (2016). Lies in disguise-a theoretical analysis of cheating.CrossRefGoogle Scholar
Erat, S (2013). Avoiding lying: The case of delegated deception. Journal of Economic Behavior & Organization, 93, 273–278. 10.1016/j.jebo.2013.03.035CrossRefGoogle Scholar
Erat, S, & Gneezy, U (2012). White lies. Management Science, 58(4), 723–733. 10.1287/mnsc.1110.1449CrossRefGoogle Scholar
Erev, I, Ert, E, & Yechiam, E (2008). Loss aversion, diminishing sensitivity, and the effect of experience on repeated decisions. Journal of Behavioral Decision Making, 21(5), 575–597. 10.1002/bdm.602CrossRefGoogle Scholar
Ertac, S (2011). Does self-relevance affect information processing? Experimental evidence on the response to performance and non-performance feedback. Journal of Economic Behavior & Organization, 80(3), 532–545. 10.1016/j.jebo.2011.05.012CrossRefGoogle Scholar
Ezquerra, L, Kolev, G, & Rodriguez-Lara, I (2018). Gender differences in cheating: Loss vs. gain framing. Economic Letters, 163, 46–49. 10.1016/j.econlet.2017.11.016CrossRefGoogle Scholar
Fischbacher, U (2007). z-Tree: Zurich toolbox for ready-made economic experiments. Experimental Economics, 10(2), 171–178. 10.1007/s10683-006-9159-4CrossRefGoogle Scholar
Fischbacher, U, & Follmi-Heusi, F (2013). Lies in disguise: An experimental study on cheating. Journal of the European Economic Association, 11(3), 525–547. 10.1111/jeea.12014CrossRefGoogle Scholar
Fryer, R. G., Levitt, S. D., List, J., & Sadoff, S. (2012). Enhancing the efficacy of teacher incentives through loss aversion: A field experiment (No. w18237). National Bureau of Economic Research.CrossRefGoogle Scholar
Garbarino, E., Slonim, R., & Villeval, M. C. (2016). Loss aversion and lying behavior: Theory, estimation and empirical evidence, mimeo.CrossRefGoogle Scholar
Gill, D, Prowse, V, & Vlassopoulos, M (2013). Cheating in the workplace: An experimental study of the impact of bonuses and productivity. Journal of Economic Behavior & Organization, 96, 120–134. 10.1016/j.jebo.2013.09.011CrossRefGoogle Scholar
Gino, F, Ayal, S, & Ariely, D (2009). Contagion and differentiation in unethical behavior: The effect of one bad apple on the barrel. Psychological Science, 20(3), 393–398. 10.1111/j.1467-9280.2009.02306.xCrossRefGoogle ScholarPubMed
Gneezy, U (2005). Deception: The role of consequences. American Economic Review, 95(1), 384–394. 10.1257/0002828053828662CrossRefGoogle Scholar
Gneezy, U, Kajackaite, A, & Sobel, J (2018). Lying aversion and the size of the lie. The American Economic Review, 108(2), 419–453. 10.1257/aer.20161553CrossRefGoogle Scholar
Gravert, C (2013). How luck and performance affect stealing. Journal of Economic Behavior & Organization, 93, 301–304. 10.1016/j.jebo.2013.03.026CrossRefGoogle Scholar
Greene, JD, & Paxton, JM (2009). Patterns of neural activity associated with honest and dishonest moral decisions. Proceedings of the National Academy of Science, 106(30), 12506–12511. 10.1073/pnas.0900152106CrossRefGoogle ScholarPubMed
Grolleau, G, Kocher, MG, & Sutan, A (2016). Cheating and loss aversion: Do people cheat more to avoid a loss?. Management Science, 62(12), 3428–3438. 10.1287/mnsc.2015.2313CrossRefGoogle Scholar
Gylfason, HF, Arnardottir, AA, & Kristinsson, K (2013). More on gender differences in lying. Economics Letters, 119(1), 94–96. 10.1016/j.econlet.2013.01.027CrossRefGoogle Scholar
Haines, VJ, Diekhoff, GM, LaBeff, EE, & Clark, RE (1986). College cheating: Immaturity, lack of commitment, and the neutralizing attitude. Research in Higher Education, 25(4), 342–354. 10.1007/BF00992130CrossRefGoogle Scholar
Hao, L, & Houser, D (2017). Perceptions, intentions, and cheating. Journal of Economic Behavior & Organization, 133, 52–73. 10.1016/j.jebo.2016.10.010CrossRefGoogle Scholar
Harinck, F, Van Dijk, E, Van Beest, I, & Mersmann, P (2007). When gains loom larger than losses reversed loss aversion for small amounts of money. Psychological Science, 18(12), 1099–1105. 10.1111/j.1467-9280.2007.02031.xCrossRefGoogle ScholarPubMed
Hilbig, BE, & Hessler, CM (2013). What lies beneath: How the distance between truth and lie drives dishonesty. Journal of Experimental Social Psychology, 49(2), 263–266. 10.1016/j.jesp.2012.11.010CrossRefGoogle Scholar
Hossain, T, & List, JA (2012). The behavioralist visits the factory: Increasing productivity using simple framing manipulations. Management Science, 58(12), 2151–2167. 10.1287/mnsc.1120.1544CrossRefGoogle Scholar
Imas, A (2016). The realization effect: Risk-taking after realized versus paper losses. The American Economic Review, 106(8), 2086–2109. 10.1257/aer.20140386CrossRefGoogle Scholar
Imas, A., Sadoff, S., & Samek, A. (2016). Do people anticipate loss aversion?. Management Science (forthcoming).Google Scholar
Jacob, BA, & Levitt, SD (2003). Rotten apples: An investigation of the prevalence and predictors of teacher cheating. Quarterly Journal of Economics, 118(3), 843–877. 10.1162/00335530360698441CrossRefGoogle Scholar
Jacobsen, C., Fosgaard, T. R., & Pascual-Ezama, D. (2017). Why do we lie? A practical guide to the dishonesty literature. Journal of Economic Surveys, (forthcoming).Google Scholar
Jiang, T (2013). Cheating in mind games: The subtlety of rules matters. Journal of Economic Behavior & Organization, 93, 328–336. 10.1016/j.jebo.2013.04.003CrossRefGoogle Scholar
Kahneman, D, & Tversky, A (1979). Prospect theory: An analysis of decision under risk. Econometrica: Journal of the Econometric Society, 47, 263–291. 10.2307/1914185CrossRefGoogle Scholar
Kajackaite, A. (2016). Lying about luck versus lying about performance. SSRN Working Paper. Available at http://dx.doi.org/10.2139/ssrn.2851149.CrossRefGoogle Scholar
Kajackaite, A, & Gneezy, U (2017). Incentives and cheating. Games and Economic Behavior, 102, 433–444. 10.1016/j.geb.2017.01.015CrossRefGoogle Scholar
Kermer, DA, Driver-Linn, E, Wilson, TD, & Gilbert, DT (2006). Loss aversion is an affective forecasting error. Psychological Science, 17(8), 649–653. 10.1111/j.1467-9280.2006.01760.xCrossRefGoogle Scholar
Kinateder, M., Kiss, H. J., & Pintér, Á. (2018). Would depositors like to show others that they do not withdraw? Theory and experiment, mimeo..Google Scholar
Kiss, HJ, Rodriguez-Lara, I, & Rosa-Garcia, A (2018). Panic bank runs. Economics Letters, 162, 146–149. 10.1016/j.econlet.2017.11.014CrossRefGoogle Scholar
Köbberling, V, & Wakker, PP (2005). An index of loss aversion. Journal of Economic Theory, 122(1), 119–131. 10.1016/j.jet.2004.03.009CrossRefGoogle Scholar
Kőszegi, B, & Rabin, M (2006). A model of reference-dependent preferences. The Quarterly Journal of Economics, 121(4), 1133–1165.Google Scholar
Kőszegi, B, & Rabin, M (2009). Reference-dependent consumption plans. American Economic Review, 99(3), 909–936. 10.1257/aer.99.3.909CrossRefGoogle Scholar
Lundquist, T, Ellingsen, T, Gribbe, E, & Johannesson, M (2009). The aversion to lying. Journal of Economic Behavior & Organization, 70(1), 81–92. 10.1016/j.jebo.2009.02.010CrossRefGoogle Scholar
Martinelli, C, Parker, SW, Pérez-Gea, AC, & Rodrigo, R (2018). Cheating and incentives: Learning from a policy experiment. American Economic Journal: Economic Policy, 10(1), 289–325.Google Scholar
May, K. M., & Loyd, B. H. (1993). Academic dishonesty: The honor system and students’ attitudes. Journal of College Student Development.Google Scholar
Mazar, N, Amir, O, & Ariely, D (2008). The dishonesty of honest people: A theory of self-concept maintenance. Journal of Marketing Research, 45, 633–644. 10.1509/jmkr.45.6.633CrossRefGoogle Scholar
Pascual-Ezama, D, Prelec, D, & Dunfield, D (2013). Motivation, money, prestige and cheats. Journal of Economic Behavior & Organization, 93, 367–373. 10.1016/j.jebo.2013.03.015CrossRefGoogle Scholar
Ploner, M, & Regner, T (2013). Self-image and moral balancing: An experimental analysis. Journal of Economic Behavior & Organization, 93, 374–383. 10.1016/j.jebo.2013.03.030CrossRefGoogle Scholar
Rodriguez-Lara, I, & Ponti, G (2017). Social motives vs. social influence: An experiment on interdependent time preferences. Games and Economic Behavior, 105, 177–194. 10.1016/j.geb.2017.06.007CrossRefGoogle Scholar
Rosenbaum, SM, Billinger, S, & Stieglitz, N (2014). Let’s be honest: A review of experimental evidence of honesty and truth-telling. Journal of Economic Psychology, 45, 181–196. 10.1016/j.joep.2014.10.002CrossRefGoogle Scholar
Schindler, S, & Pfattheicher, S (2017). The frame of the game: Loss-framing increases dishonest behavior. Journal of Experimental Social Psychology, 69, 172–177. 10.1016/j.jesp.2016.09.009CrossRefGoogle Scholar
Schweitzer, ME, Ordóñez, L, & Douma, B (2004). Goal setting as a motivator of unethical behavior. Academy of Management Journal, 47(3), 422–432.CrossRefGoogle Scholar
Serra-Garcia, M, Van Damme, E, & Potters, J (2013). Lying about what you know or about what you do?. Journal of the European Economic Association, 11(5), 1204–1229. 10.1111/jeea.12034CrossRefGoogle Scholar
Shalvi, S, Dana, J, Handgraaf, MJ, & De Dreu, CK (2011). Justified ethicality: Observing desired counterfactuals modifies ethical perceptions and behavior. Organizational Behavior and Human Decision Processes, 115(2), 181–190. 10.1016/j.obhdp.2011.02.001CrossRefGoogle Scholar
Spranca, M, Minsk, E, & Baron, J (1991). Omission and commission in judgment and choice. Journal of Experimental Social Psychology, 27(1), 76–105. 10.1016/0022-1031(91)90011-TCrossRefGoogle Scholar
Sutter, M (2009). Deception through telling the truth? Experimental evidence from individuals and teams. The Economic Journal, 119(534), 47–60. 10.1111/j.1468-0297.2008.02205.xCrossRefGoogle Scholar
Terzi, A, Koedijk, K, Noussair, CN, & Pownall, R (2016). Reference point heterogeneity. Frontiers in Psychology, 7, 1347 10.3389/fpsyg.2016.01347CrossRefGoogle ScholarPubMed
Thaler, R (1985). Mental accounting and consumer choice. Marketing Science, 4(3), 199–214. 10.1287/mksc.4.3.199CrossRefGoogle Scholar
Utikal, V, & Fischbacher, U (2013). Disadvantageous lies in individual decisions. Journal of Economic Behavior & Organization, 85, 108–111. 10.1016/j.jebo.2012.11.011CrossRefGoogle Scholar
Vanberg, C (2017). Who never tells a lie?. Experimental Economics, 20, 448–459. 10.1007/s10683-016-9491-2CrossRefGoogle Scholar
Weber, M, & Zuchel, H (2005). How do prior outcomes affect risk attitude? Comparing escalation of commitment and the house-money effect. Decision Analysis, 2(1), 30–43. 10.1287/deca.1050.0034CrossRefGoogle Scholar
Supplementary material: File

Charness et al. supplementary material

Online Appendix
Download Charness et al. supplementary material(File)
File 195.8 KB