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

Christoph Huber () and Juergen Huber

No b5682, OSF Preprints from Center for Open Science

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, 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.

Date: 2020-04-10
New Economics Papers: this item is included in nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:b5682

DOI: 10.31219/osf.io/b5682

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