Do Fines Deter Unethical Behavior? The Effect of Systematically Varying the Size and Probability of Punishment

Laske, Katharina; Saccardo, Silvia; Gneezy, Uri

doi:10.2139/ssrn.3157387

Cited by 9 publications

(12 citation statements)

References 13 publications

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“…While the general deterrence effect of punishment seems to be well established with observational (Goel & Rich, 1989) as well as with experimental data (Boly & Gillanders, 2018;Hanna, Bishop, Nadel, Scheffler, & Durlacher, 2011;Nagin, 2013), the interplay between the effects of increasing its severity and probability is less clear. Although Nagin (2013) argues that the probability of punishment 3 and not the severity of punishment serves as a deterrent, findings from laboratory studies in general suggest that the severity of punishment has the stronger deterrent effect (Friesen, 2012;Laske et al, 2018). One reason for the stronger effect of severity of punishment is that it is easier to evaluate fines than absolute probabilities.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Despite the amount of research interest in the effects of these two factors, the results remain mixed and inconclusive (Boly & Gillanders, 2018). For example, findings in crime studies suggest that the detection probability plays a greater role in deterring criminal behavior (Nagin, 2013), while laboratory studies in general support the notion that the size of punishment has a stronger effect (Laske, Saccardo, & Gneezy, 2018). One possible reason is that laboratory studies often explore effects of punishment in settings in which punishable behavior does not clearly violate any internalized social or moral norms (Friesen, 2012).…”

Section: Introductionmentioning

confidence: 99%

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Experimental test of the effects of punishment probability and size on the decision to take a bribe

Bahník

Vranka

2022

Journal of Behavioral and Experimental Economics

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Punishment is one of the main methods for preventing corruption. However, studies on the effect of size and probability of punishment on bribe-taking have not yielded conclusive results, possibly because studies often abstract from internal costs of wrongdoing. We introduce a punishment by a fine or termination of the task, both with varying probabilities, in a laboratory task modeling the decision to take a bribe. The punishment decreased the probability of taking higher bribes, even though the probability of taking lower bribes was unaffected. Participants took fewer bribes when the fine was larger and more probable. We did not observe any clear negative effects of small punishment crowding out intrinsic motivation to behave honestly. However, we found that the effects of punishment differ based on emotionality and honesty-humility of participants. The study shows that the prospect of punishment may deter dishonest behavior; however, personality characteristics should be taken into account when devising an effective deterrence policy.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Experimental test of the effects of punishment probability and size on the decision to take a bribe

Bahník

Vranka

2022

Journal of Behavioral and Experimental Economics

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show abstract

“…While the general deterrence effect of punishment seems to be well established with observational (Goel & Rich, 1989) as well as with experimental data (Boly & Gillanders, 2018;Hanna et al, 2011;Nagin, 2013), the interplay between the effects of increasing its severity and probability is less clear. Although Nagin (2013) argues that the probability of punishment 2 and not the severity of punishment serves as a deterrent, findings from laboratory studies in general suggest that the severity of punishment has the stronger deterrent effect (Friesen, 2012;Laske et al, 2018). One reason for the stronger effect of severity of punishment is that it is easier to evaluate fines than absolute probabilities.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Although other experimental studies tested effects of punishment and its probability (Friesen, 2012;Laske et al, 2018), they do so in settings without any clearly stated norms of conduct, making them unsuitable for the study of the interplay between effects of external punishment and internal costs of wrongdoing. However, when one is interested also in factors related to the internalized psychological norms against corrupt behavior and their possible crowding out, it is essential that participants perceive the task in moral terms.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Despite the amount of research interest in the effects of these two factors, the results remain mixed and inconclusive (Boly & Gillanders, 2018). For example, findings in crime studies suggest that detection probability plays a greater role in deterring criminal behavior (Nagin, 2013), while laboratory studies in general support the notion that the size of punishment has a stronger effect (Laske, Saccardo, & Gneezy, 2018). One possible reason is that laboratory studies often explore effects of punishment in settings in which punishable behavior does not violate any social or moral norms (Friesen, 2012).…”

Section: Introductionmentioning

confidence: 99%

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Experimental test of the effects of punishment probability and size on the decision to take a bribe

Bahník¹,

Vranka²

2020

Preprint

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Punishment is one of the main methods for preventing corruption. However, studies on the effect of size and probability of punishment on bribe-taking have not yielded conclusive results. We introduce a punishment by a fine or termination of the task, both with varying probabilities, in a laboratory task modeling the decision to take a bribe. The punishment decreased the probability of taking higher bribes, even though the probability of taking lower bribes was unaffected. Participants took fewer bribes when the fine was larger and more probable. We did not observe any clear negative effects of small punishment crowding out intrinsic motivation to behave honestly. However, we found that effects of punishment differ based on emotionality and honesty-humility of participants. The study shows that the prospect of punishment may deter dishonest behavior; however, personality characteristics should be taken into account when devising an effective deterrence policy.

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Cheating: One common morality for gains and losses but two components of morality itself

Markiewicz

Czupryna

2019

Behavioral Decision Making

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Previous studies show that decision makers (DMs) lie more to avoid a loss than achieve a gain. Two compelling mechanisms might explain this observation. One assumes that lying is a risky activity and relates to the shape of the monetary value function described by prospect theory, which assumes (a) increased risk taking for loss frames and (b) an asymmetry between the perceived values of losses and gains. The other relates to the importance of self‐esteem functions as expressed in self‐concept maintenance models, self‐esteem issues being weighed against monetary issues. This alternative explanation assumes that a loss frame serves as a factor lowering moral considerations. We report an experimental study presenting sets of lotteries to DMs, once in a moral context and once in a traditional probabilistic context. The results show that DMs take less risk when lotteries are presented in a moral context. It is also shown that DMs take more risk for losses than gains, this holding for both the moral and probabilistic contexts. This latter result suggests that loss/gain asymmetry can be completely explained by prospect theory factors, and framing makes no difference to the valuing of moral considerations.

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Do Fines Deter Unethical Behavior? The Effect of Systematically Varying the Size and Probability of Punishment

Cited by 9 publications

References 13 publications

Experimental test of the effects of punishment probability and size on the decision to take a bribe

Experimental test of the effects of punishment probability and size on the decision to take a bribe

Experimental test of the effects of punishment probability and size on the decision to take a bribe

Cheating: One common morality for gains and losses but two components of morality itself

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