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Team Goal Incentives and Individual Lying Behavior

Julian Conrads, Mischa Ellenberger, Bernd Irlenbusch, Elia Nora Ohms, Rainer Michael Rilke and Gari Walkowitz

No 17-02, WHU Working Paper Series - Economics Group from WHU - Otto Beisheim School of Management

Abstract: In this article we examine the influence of two goal compensation schemes on lying behavior. Based on the die rolling task of Fischbacher/Föllmi-Heusi (2013), we apply an individual goal incentive scheme and a team goal incentive scheme. In both settings individuals receive a fixed bonus when attaining the goal. We find that under team goal incentives subjects are less inclined to over-report production outputs beyond the amount which is on average necessary for goal attainment. Investigating subjects’ beliefs on their team mates’ behavior under team goal incentives reveals that subjects who either believe that lying is not profitable (i.e., the team goal cannot be reached with a lie) or not absolutely necessary (i.e., there is a good chance that the team goal can also be reached without lying) tend to be honest. We also find that subjects who believe that the team goal has already been reached by their team mates tend to over-report production outputs. Across treatments, women are found to be more honest than men. Subjects’ personality is not associated with reported production outputs. Our work contributes to previous research on how different compensation schemes affect unethical behavior in organizational settings.

Keywords: Compensation schemes; Lying; Teams; Goals; Individual differences; Experiment (search for similar items in EconPapers)
JEL-codes: C91 C92 M52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-hrm
Date: 2017-03-16
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Published, Die Betriebswirtschaft 76, 2016

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