IDEAS home Printed from https://ideas.repec.org/a/beh/jbepv1/v8y2024i2p55-60.html
   My bibliography  Save this article

Auditing with Rewards for Honesty and Punishments for Cheating

Author

Listed:
  • Austin Henderson

    (Washington State University, Elson S. Floyd College of Medicine, Institute for Research and Education to Advance Community Health)

Abstract

Policies to deter misbehavior often use audits, which probabilistically detect misbehavior, and punishments. While punishments may be undesirable due to practical or ethical concerns, policies of auditing with rewards for detected good behavior are seldom used or studied. In an online experiment, I tested the effects of rewards for honest behavior, as well as combinations of punishments and rewards, on cheating. I found that small probabilities of large rewards were effective when combined with punishments, but small rewards were ineffective or backfired. These findings provide guidance for implementing rewards and contribute to knowledge of how auditing schemes affect behavior.

Suggested Citation

  • Austin Henderson, 2024. "Auditing with Rewards for Honesty and Punishments for Cheating," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 8(2), pages 55-60, December.
    • Handle: RePEc:beh:jbepv1:v:8:y:2024:i:2:p:55-60
    as

    Download full text from publisher

    File URL: http://sabeconomics.org/journal/RePEc/beh/JBEPv1/articles/JBEP-8-2-4.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ingvild Almås & Alexander W. Cappelen & Bertil Tungodden, 2020. "Cutthroat Capitalism versus Cuddly Socialism: Are Americans More Meritocratic and Efficiency-Seeking than Scandinavians?," Journal of Political Economy, University of Chicago Press, vol. 128(5), pages 1753-1788.
    2. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    3. Dulleck, Uwe & Fooken, Jonas & Newton, Cameron & Ristl, Andrea & Schaffner, Markus & Torgler, Benno, 2016. "Tax compliance and psychic costs: Behavioral experimental evidence using a physiological marker," Journal of Public Economics, Elsevier, vol. 134(C), pages 9-18.
    4. Giorgio Coricelli & Mateus Joffily & Claude Montmarquette & Marie Villeval, 2010. "Cheating, emotions, and rationality: an experiment on tax evasion," Experimental Economics, Springer;Economic Science Association, vol. 13(2), pages 226-247, June.
    5. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
    6. Erin L. Krupka & Roberto A. Weber, 2013. "Identifying Social Norms Using Coordination Games: Why Does Dictator Game Sharing Vary?," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 495-524, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marie Claire Villeval, 2019. "Comportements (non) éthiques et stratégies morales," Revue économique, Presses de Sciences-Po, vol. 70(6), pages 1021-1046.
    2. Barron, Kai & Stüber, Robert & Veldhuizen, Roel van, 2022. "Moral Motive Selection in the Lying-Dictator Game," Working Papers 2022:16, Lund University, Department of Economics.
    3. repec:cup:judgdm:v:14:y:2019:i:4:p:423-439 is not listed on IDEAS
    4. Thunström, Linda, 2019. "Preferences for fairness over losses," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    5. Margarita Leib & Simone Moran & Shaul Shalvi, 2019. "Dishonest helping and harming after (un)fair treatment," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(4), pages 423-439, July.
    6. James Alm & Antoine Malézieux, 2021. "40 years of tax evasion games: a meta-analysis," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 699-750, September.
    7. Dato, Simon & Feess, Eberhard & Nieken, Petra, 2024. "Lying in competitive environments: Identifying behavioral impacts," European Economic Review, Elsevier, vol. 170(C).
    8. Garbarino, Ellen & Slonim, Robert & Villeval, Marie Claire, 2019. "Loss aversion and lying behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 379-393.
    9. Sven A. Simon, 2020. "Is It a Lie if I Don't Know? Self-Serving Dishonesty Under Ignorance," Working Papers tax-mpg-rps-2020-12, Max Planck Institute for Tax Law and Public Finance.
    10. Marcelo Bergolo & Rodrigo Ceni & Guillermo Cruces & Matias Giaccobasso & Ricardo Perez-Truglia, 2023. "Tax Audits as Scarecrows: Evidence from a Large-Scale Field Experiment," American Economic Journal: Economic Policy, American Economic Association, vol. 15(1), pages 110-153, February.
    11. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    12. Dezső, Linda & Alm, James & Kirchler, Erich, 2022. "Inequitable wages and tax evasion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    13. Grundmann, Susanna, 2020. "Do just deserts and competition shape patterns of cheating?," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-79-20, University of Passau, Faculty of Business and Economics.
    14. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    15. Bartoš, Vojtěch, 2021. "Seasonal scarcity and sharing norms," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 303-316.
    16. Gill, David & Prowse, Victoria & Vlassopoulos, Michael, 2013. "Cheating in the workplace: An experimental study of the impact of bonuses and productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 120-134.
    17. Hugh-Jones, David & Ooi, Jinnie, 2023. "Where do fairness preferences come from? Norm transmission in a teen friendship network," European Economic Review, Elsevier, vol. 157(C).
    18. Fochmann, Martin & Wolf, Nadja, 2019. "Framing and salience effects in tax evasion decisions – An experiment on underreporting and overdeducting," Journal of Economic Psychology, Elsevier, vol. 72(C), pages 260-277.
    19. Aperjis, Christina & Bosch-Rosa, Ciril & Friedman, Daniel & Huberman, Bernardo A., 2014. "Boiling the frog optimally: Nan experiment on survivor curve shapes and internet revenue," SFB 649 Discussion Papers 2014-058, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    20. Basu, Arnab K. & Chau, Nancy H. & Kundu, Anustup & Sen, Kunal, 2025. "Dishonesty Concessions in Teams: Theory and Experimental Insights from Local Politicians in India," IZA Discussion Papers 17628, Institute of Labor Economics (IZA).
    21. Huber, Christoph & Huber, Jürgen, 2020. "Bad bankers no more? Truth-telling and (dis)honesty in the finance industry," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 472-493.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:beh:jbepv1:v:8:y:2024:i:2:p:55-60. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SABE (email available below). General contact details of provider: https://edirc.repec.org/data/sabeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.