Bad bankers no more? Truth-telling and (dis)honesty in the finance industry
Christoph Huber () and
Jürgen Huber ()
Working Papers from Faculty of Economics and Statistics, University of Innsbruck
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, and 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, while for a control group we find no such differences. Further variations on the financial decision situation do not worsen financial professionals' honesty. As driver of the observed behavior we find reputational concerns to play a major role in financial professionals' decisions.
Keywords: dishonesty; cheating; financial professionals; framing, context-dependence; experiment (search for similar items in EconPapers)
JEL-codes: A13 C91 D90 G41 (search for similar items in EconPapers)
Pages: 44 pages
New Economics Papers: this item is included in nep-exp and nep-hpe
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Working Paper: Bad bankers no more? Truth-telling and (dis)honesty in the finance industry (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2020-03
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