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The indirect effect of monetary incentives on deception

Janna Ter Meer
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Janna Ter Meer: University of Cologne

No 05-04, Cologne Graduate School Working Paper Series from Cologne Graduate School in Management, Economics and Social Sciences

Abstract: This paper investigates whether working under competitive or cooperative incentives affects deception in a subsequent, unrelated task. I use a laboratory study with two stages. First, participants work under a piece rate, tournament or team incentive in a real effort task. The second part consists of a sender-receiver game where the sender can gain financially at the expense of the receiver by sending a deceptive message. I find that senders who worked under tournament incentives are less honest than those who worked under a piece rate. I find no increase in honesty for those who performed under team incentives relative to the piece rate. Interestingly, this only holds when participants are not informed about their relative performance during the work task. When such feedback is provided I find that relative performance affects honesty across all incentive conditions. In particular, honesty decreases as relative performance differences become small.

JEL-codes: M52 C92 D02 D03 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-cta, nep-exp and nep-hrm
Date: 2014-07-07
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Persistent link: http://EconPapers.repec.org/RePEc:cgr:cgsser:05-04

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