Professor Cohn, first of all please tell us about your study on civic honesty around the world. What did it involve?
We hypothesized that people would be less likely to return a wallet that had more money inside.
About 10 years ago, I started a research program on honest behavior together with my long-term collaborator Michel Maréchal. As economists, we want to better understand why people behave (dis)honestly because honesty is essential for almost all social and economic relations. For example, if you buy something on eBay, you need to trust the seller that he is honest and will deliver what he promised. When we started our investigation, there was little research on honesty in everyday life situations. Most of what we knew came from laboratory experiments which typically use university students from Western countries as study participants. In 2013, one of our students went for an exchange semester to Finland and so we seized the opportunity to run a field experiment to measure people’s honesty.
Specifically, we asked the student to turn in lost wallets to employees at various businesses and vary how much money there was in the wallets. We hypothesized that people would be less likely to return a wallet that had more money inside. Much to our surprise, we observed the opposite, that is, people were more rather than less likely to return a wallet that contained more money. At first, we almost couldn’t believe the data and so we decided to do more tests by expanding the study to more countries and by raising the stakes. To this end, we had to secure more funding, which wasn’t easy because it was a relatively expensive research project. We also had to assemble and train a team consisting of 13 research assistants. We further developed detailed scripts and manuals so that the research assistants knew exactly how to plan their trips, perform the drop-offs and deal with emergency situations. We also had to purchase a usually large number of wallets and other materials that were placed into the wallets such as a key. In the end, our research team visited 355 cities in 40 countries and dropped more than 17,000 wallets. The result of this undertaking: In almost all countries, people were more likely to return wallets that contained more money. Thus, the global study confirmed the initial results from the pilot study.
Are individuals likely to act more dishonestly when larger sums are involved?
This was also our initial belief, which wasn’t confirmed in our study. Standard models in economics predict that, all else being equal, honest behavior will become less common as the financial incentives for dishonesty increase. In contrast, models of human behavior that incorporate psychological factors such as altruism and the desire to maintain a positive self-image allow for different predictions about the role of financial incentives. However, the relationship between honest behavior and financial incentives for dishonesty appears to be more complicated than previously assumed. In particular, our study suggests that financial incentives for dishonesty increase the importance of psychological motivations, resulting in the unexpected finding that people behave more honestly when larger sums are involved. Of course, this may not be true in every context or for very large amounts of money, but our study nonetheless illustrates the complex interplay between financial incentives and psychological motivations. Thus, policy makers should be attentive to these effects when they use financial incentives to encourage certain behaviors.
Are individuals who are worse off financially more likely to be dishonest?
Our study cannot directly address this question because we don’t have information about the participants’ financial situations. They didn’t know that they were part of a study, so we couldn’t just ask them about their financial background. However, we find a relatively strong positive correlation between GDP per capita (which can be used a proxy measure of a country’s income) and levels of honesty at the country level. Thus, richer countries tend to be more honest than poorer countries. Notice, however, that causality could also run the other way, meaning that more honest societies are economically more successful.
While we cannot say much about whether the rich are more or less honest than the poor, we conducted additional experiments where we manipulated people’s perceptions of how wealthy the owner of the wallet is by including bank statements in the wallet. In France we found no differences across conditions. In the US, we found that wealthier owners are more likely to be contacted but we only looked at African-American owners.
Studies have been conducted on the subject in laboratory settings and your study was conducted on a global scale in a ‘real life’ environment. Please tell us about the differences.
There are pros and cons of running a study in a laboratory environment versus a field setting. In the laboratory, people understand that their behavior is being scrutinized which may affect how they behave. This may be particularly true in the context of honest behavior as people have a natural desire to be seen as honest. In our study, people didn’t know that they were participating in a study, so they didn’t have to worry about their reputation (at least vis-à-vis the researchers). Another potential drawback of laboratory experiments is that they usually rely on university students as study participants. It is a priori unclear whether students behave in a similar way as other members of society or whether their behavior is systematically different. On the other hand, laboratory experiments allow for much tighter experimenter control. For example, in the lab you have full control over what information participants have and you can better limit the impact of nuisance factors such as fatigue. In my view, the best approach is to use a combination of methods because it allows you to balance the advantages and disadvantages of different methods.
Professor Alain Cohn is assistant professor at the School of Information, University of Michigan. His main fields are behavioral, experimental and labor economics. His research focuses on the origins and consequences of social preferences and moral behavior. Cohn uses theories and methods from economics, social psychology, sociology and neuroscience. Much of his work is based on laboratory, field and online experiments, often involving non-standard subject pools such as financial professionals, millionaires and criminals. His studies have been published in top general science and economics journals, including Nature, American Economic Review and Review of Economics Studies. He conducted the famous research “Civic Honesty Around the Globe” and is the recipient of the Diligentia Prize for his work.
Photos: From the Archive of Professor Alain Cohn, Shutterstock
Read the II part of the interview with Professor Alain Cohn on Friday October 2nd.
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