Fraud Deterrence Institutions Reduce Intrinsic Honesty

Fabio Galeotti, Valeria Maggian and Marie Claire Villeval

No 2039, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

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, 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 behavior 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.

Keywords: Deterrence Institutions; Intrinsic Honesty; Spillovers; Quasi-Experiment (search for similar items in EconPapers)
JEL-codes: C93 D02 D91 K42 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-exp
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Downloads: (external link)
ftp://ftp.gate.cnrs.fr/RePEc/2020/2039.pdf (application/pdf)

Related works:
Journal Article: Fraud Deterrence Institutions Reduce Intrinsic Honesty (2021)
Working Paper: Fraud Deterrence Institutions Reduce Intrinsic Honesty (2021)
Working Paper: Fraud Deterrence Institutions Reduce Intrinsic Honesty (2020)
Working Paper: Fraud Deterrence Institutions Reduce Intrinsic Honesty (2020)
Working Paper: Fraud Deterrence Institutions Reduce Intrinsic Honesty (2019)
Working Paper: Fraud Deterrence Institutions Reduce Intrinsic Honesty (2019)
Working Paper: Fraud Deterrence Institutions Reduce Intrinsic Honesty (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:2039

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