6. Investigating Honesty

Question 1

Why is honesty economically relevant?

Answer 1

Because many situations are characterised by asymmetric info

Question 2

Describe the set up of die in a cup task. (Fischbacher & Follmi- Heusi 2013)

Answer 2

Treatments
Baseline
Control treatments
- stakes: 3x payouts in baseline
- externality: another subject receives 5- claimed amount
- double anonymity: subjects take claimed amount out of an envelope and return the envelope with the rest of the money to an urn
Repetition
Beliefs

Question 3

Results of Fischbacher & Follmi-Heusi 2013

Answer 3

Baseline
0= 6.4%
1= 7.2%
2= 11.6%
3= 12.6%
4= 27.2%
5= 35.0%
-People are marginally more honest in higher stakes treatment.
-People are more honest in externality treatment
-No effects of double anonymity

Question 4

Lying aversion

Answer 4

People don’t like the feeling of lying. They might balance the feelings of guilt with the benefit of lying

Question 5

Lies in disguise

Answer 5

If people care about the credibility of the lie, they might not choose 5. People might also refrain from lying to maintain a positive self concept

Question 6

Describe set up of Cohn, Marechal, Fehr 2014

Answer 6

-Swiss bankers asked to toss a coin ten times and to report number of heads which pays $20
-treatment makes banker identity salient, control doesn’t

Question 7

Results of Cohn, Marechal, Fehr 2014

Answer 7

-Bank employees in the professional identity condition reported 58.2% successful coin flips which is significantly above chance and significantly higher than the reported success in the control group.
-Bankers are predicted as less honest than general public.
-Results suggest the prevailing business culture in the banking industry favours dishonest behaviour

Question 8

Describe set up of Mazar Et al 2008

Answer 8

-Matrix task: find pair of numbers that sum up to 10
-Control: do task for 5 mins then show answers to experimenter
-Recycle: do task for 5 mins but answer sheets are shredded so experimenter can’t see the results
-Recycle and honour code: same as recycle but sheet says “I understand that this short survey falls under MIT’s honour system”

Question 9

Results of Mazar Et al 2008

Answer 9

-There is only limited cheating since people want to maintain self image of being an honest person.
-No cheating in recycle and honour code
-Slightly more lying when higher stakes are used. ($5 vs $2.50)

Question 10

Describe the set up of Gneezy 2005

Answer 10

-P1 has private info about payoffs and P2 chooses between actions A or B. Message from P1 procedes action but only actions determine payoffs.
-two actions, A and B, and two messages:
Message A “Option A will earn you more money than option B”
Message B “ Option B will earn you more money than option A”

Question 11

Results of Gneezy 2005

Answer 11

-P1 lies 52% of the time when there is a high profit to be gained from lying
-P1 lies 17% of the time when there is a low profit to be gained from lying and P2 loses a lot
-P1 lies 36% of the time when low profit gain but low loss for P2

Question 12

What do Abeler, Nosenzo, Raymond find in meta analysis on using die roll paradigm?

Answer 12

90 papers, 44,000+ subjects, 47 countries
Level of incentives don’t matter

Question 13

Describe set up of Gerlach 2019

Answer 13

Meta analysis comparing all methods of honesty (sender-receiver, coin flip, die roll, matrix)
565 experiments, 44,000+ participants

Question 14

Results of Gerlach 2019

Answer 14

-roughly 50% rate of liars across all methods
-Highest rate in sender receiver, lowest in coin flip
-men appear to lie 4% more often than women
-younger people lie slightly more
-more lying happens in lab when compared to field

Question 15

Describe the set up of Pruckner & Sausbruger 2013

Answer 15

Newspapers sold in Austria by honour system
3 treatments
- paper costs €0.60
- paper costs €0.60. Stealing a paper is illegal
- paper costs €0.60. Thank you for being honest

Question 16

Results of Pruckner & Sausbruger 2013

Answer 16

2/3 of people don’t pay and most pay less than €0.60.
Legal appeal has no effect, moral appeal increases payments

Question 17

Describe set up of Cohn & Marechal 2018

Answer 17

Students often misbehave. Can a lab measure predict it?
-162 Swiss middle and high school students (12-20, 43% female)
-students receive envelope with 10 50p coins. Asked to toss each coin in private and allowed to keep head tosses, put tails back into envelope.
-teachers evaluate the students on following questions
1. Is the student often absent?
2. Does the student rarely complete his/her homework?
3. Is the student frequently disruptive in class?

Question 18

Results of Cohn & Marechal 2018

Answer 18

Students took 62.8% of the coins- 25% cheating rate
Cheating is positively related to teachers evaluation of misconduct and statistically significantly across all 3 evaluations

Question 19

Describe the set up of Dai Et al 2018

Answer 19

-244 participants recruited in Lyon train station and asked to participate in research study on transport behaviour if they had no monthly pass. 35 subjects recruited from fine collection office. Payment in gift vouchers.
-at the end, participants were asked to exchange their ticket (if they had one) for a valid one
-study details
1. Elicitation of attitudes towards risks and losses
2. Measure of honesty using a version of die roll experiment
3. Measurement of dishonesty in a “public transportation game”
4. Final questionnaire

Question 20

In the Dai Et al 2018 study describe the public transport game

Answer 20

-decision to buy a ticket or not for an imaginary bus
-for every possible final stop (stops 1-7) subjects have to say whether they buy ticket or not. One decision randomly selected from payment.
-price of ticket €1.80
-benefits either increased by €2 per stop, expected benefit €8. Or were constant €8.

Question 21

In Dai Et al 2018, how many people didn’t possess a valid ticket and how many self reported fare dodging at least 1 out of last 10 trips?

Answer 21

41.8% don’t have ticket
54.9% fare dodging at least 1 out of last 10 trips

Question 22

Results from die in a cup in Dai Et al 2018?

Answer 22

-no ticket people lie significantly more than those with tickets
-subjects who have just paid a fine at collection office are more honest

Question 23

Results from public transport game in Dai Et al 2018?

Answer 23

-self reported fraudsters commit ticket fraud more than self reported nonfraudsters regardless of whether either have a ticket.
-36% is the mean rate of ticket fraud
-those from fine collection office commit more fraud than average

Question 24

What does the experiment with 192 students in Lyon lab show?

Answer 24

Subjects are overpaid. Those who don’t return the money are also more likely to lie in die in a cup.
Results support robustness and generalisability of previous findings

Question 25

What is an important foundational question for all applied research?

Answer 25

What can we learn from stylised lab experiments which are often guided by game theoretical models? Are field studies more “realistic”?

Question 26

What is the hallmark of all experimentation?

Answer 26

Controlled variation. The only important issue is how to achieve the best causal identification. Distinction between lab/field is less important

Question 27

Why is the die rolled twice in the die in a cup experiment?

Answer 27

So that the subject has credible deniability. If we ask them to roll once and we then pick up the cups we can see what they rolled

Question 28

What does partial dishonesty predict in die in a cup?

Answer 28

Higher reports are more likely than lower reports

Question 29

What can the number of reports of 6 tell us in the die in the cup experiment?

Answer 29

The degree of honesty

Question 30

Which papers are relevant to a question on honesty?

Answer 30

-Fischbacher & Follmi-Heusi (2013): die in a cup
-Cohn Et Al (2014): Swiss bankers
-Mazar Et Al (2008): matrix
-Gneezy (2005): sender receiver
-Abeler et Al- meta analysis on die roll
-Gerlach et Al (2019): meta on honesty methods
-Pruckner & Sausbruger (2013): newspapers
-Cohn Et Al (2018): coin toss with students
-Dai Et Al (2018): public transport France