Institutional inequality and individual preferences for honesty and generosity

Abstract

This paper reports on an experiment that investigates how inequality in advantage affects individual preferences for honesty and generosity. In a two-stage experiment, subjects first earn money according to self-reported production, which can include honest and dishonest reports. Subjects then play the dictator game and decide how much, if any, of their earnings to share with an anonymous recipient. Treatments investigate how equal and unequal advantages in production affect the extent of cheating in stage one and the subsequent offers in stage two. When advantage randomly benefits only some of the group, the relatively disadvantaged are significantly more dishonest and exhibit significantly less other-regarding behavior. Considering the interplay between cheating and giving, we find that greater cheating was followed with greater giving. And comparing this relationship across treatments suggests self-justification for dishonest behavior makes subjects feel more entitled to their illgotten gains.

Material Scarcity and Unethical Economic Behavior: A Systematic Review and Meta-Analysis

“…However, the evidence on the impact of material scarcity on unethical economic behavior is characterized by seemingly mixed findings. Some studies suggest that material scarcity increases unethical behavior (Birkelund & Cherry, 2020;Goldsmith et al, 2018;Prediger et al, 2014;Sharma et al, 2014;Yam et al, 2014) while other studies indicate that material scarcity increases prosocial behavior (Bartos, 2016;DeWall et al, 2008;Häusser et al, 2019;Herzenstein & Posavac, 2019;Huppert et al, 2020). These mixed findings have also spurred a new debate on how material scarcity affects decision-making more generally (Hall et al, 2014;Mani et al, 2013;Mullainathan & Shafir, 2014;Shah et al, 2012) Here, we present the first pre-registered systematic review and meta-analysis on the relationship between experiences of material scarcity and unethical economic behavior.…”

“…The findings that material scarcity increases risk-taking, impulsiveness, and future discounting have led scholars to hypothesize that scarcity increases unethical economic behavior based on the argument that individuals constricted of resources exhibit an increased focus on regaining the experienced lack of resources in the short term (Birkelund & Cherry, 2020;Gino & Pierce, 2010;Sharma et al, 2014;Yam et al, 2014). In what follows, we present a systematic review of extant scientific studies on this topic, which aligned with the inclusion criteria for the subsequent meta-analysis.…”

“…More recently, Birkelund and Cherry (2020) found that individuals experiencing financial inequality (vs. equality) cheated significantly more for monetary resources in an experimental dishonesty task and justified such behavior as result of the experienced scarcity.…”

“…A GOSH-analysis of heterogeneity revealed that 4 articles (k = 4) accounted for a large degree of the observed heterogeneity (Birkelund & Cherry, 2020) (DeWall et al, 2008) (Herzenstein & Posavac, 2019) (Roux et al, 2015). Rerunning the analysis without these studies reduced the heterogeneity of the global model to 𝐼𝐼 2 = 21.9% and yielded a revised statistically significant pooled effect size estimate of 0.1672.…”

Inequitable Wages and Tax Evasion

“…1 Indeed, growing research on (un)ethical behaviors documents that experiencing unfairness adversely shapes ethical preferences. After experiencing distributive injustice in the form of inequitable monetary outcomes, individuals are more likely to steal (Greenberg, 1993;John, Loewenstein, & Rick, 2014), lie (Houser et al, 2012), or cheat (Birkelund & Cherry, 2020;Galeotti, Kline, & Orsini, 2017) to improve their financial condition.…”