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Do just deserts and competition shape patterns of cheating?

Susanna Grundmann

No V-79-20, Passauer Diskussionspapiere, Volkswirtschaftliche Reihe from University of Passau, Faculty of Business and Economics

Abstract: Previous research has shown that people accept inequalities resulting from differences in performance but aim at reducing those resulting from differences in luck, corresponding to the fairness principle of just deserts. But will just deserts also intrinsically prevent people from cheating for their personal gain in a situation in which cheating can be disguised? And will competitive pressure crowd-out such an intrinsic motivation? I investigate these questions in a lab experiment based on Grundmann and Lambsdorff (2017). Subjects earn income and report a tax rate, which they determine by rolling a die under a cup, creating an incentive to cheat. Treatments vary whether the size of income is based on performance or luck and whether there is competition for a high income. In the luck treatments, just deserts would imply that subjects aim at reducing inequalities, such that cheating should decrease with income. If income is based on performance, the opposite should be true. The results show that cheating increases with income in the performance and the luck treatments, such that lucky subjects as well as high performers do not aim at reducing inequality. Just deserts thus do not intrinsically prevent subjects from cheating for their personal gain. Competition has no systematic effect on cheating.

Keywords: cheating; tax morale; laboratory experiment; income; real-effort task; distributive justice; just deserts; competition (search for similar items in EconPapers)
JEL-codes: H26 C91 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cbe and nep-exp
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