Fraud Deterrence Institutions Reduce Intrinsic Honesty

Fabio Galeotti (1) , Valeria Maggian (2) , Marie Claire Villeval (1)

1 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
2 University of Ca’ Foscari [Venice, Italy]

Deterrence institutions are widely used in modern societies to discourage rule violations but whether they have an impact beyond their immediate scope of application is usually ignored. Using a natural field experiment, we show that they affect intrinsic honesty across contexts. We identified fraudsters and non-fraudsters in public transport who were or not exposed to ticket inspections by the transport company. We then measured the intrinsic honesty of the same persons in a new unrelated context where they could misappropriate money. Instead of having an educative effect across contexts, the exposure to deterrence practices increases unethical behavior of fraudsters but also of non-fraudsters.

Mots clés: Deterrence Institutions; Intrinsic Honesty; Spillovers

Domaines: Economies et finances

Fabio Galeotti, Valeria Maggian, Marie Claire Villeval. Fraud Deterrence Institutions Reduce Intrinsic Honesty. 2019. ⟨halshs-02281894⟩