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Bad bankers no more? Truth-telling and (dis)honesty in the finance industry

Christoph Huber () and Jürgen Huber

Journal of Economic Behavior & Organization, 2020, vol. 180, issue C, 472-493

Abstract: Worries about unethical behavior are a recurring issue in the finance industry, which has inspired a number of recent studies. We contribute to this ongoing discussion by investigating preferences for truthfulness within the finance industry in a controlled experiment with 415 financial professionals (and 270 students as a control group). Participants have to report one of two numbers, of which one is true, the other false, where truth-telling is costly. In three main treatments we vary the situational context of subjects’ decisions (abstract, neutral, finance context) by applying differently framed instructions. We find that contexts matter for financial professionals: they act more honestly in a financial context and a neutral context than in an abstract situation, while for a control group we find no such differences. Further variations on the financial decision situation do not affect financial professionals’ honesty.

Keywords: Dishonesty; Cheating; Financial professionals; Framing; Context-dependence; Experimental finance (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:180:y:2020:i:c:p:472-493

DOI: 10.1016/j.jebo.2020.10.020

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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