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Honesty is predicted by moral values and economic incentives but is unaffected by acute stress - new publication by Nina Sooter, Rajna Gibson Brandon, and Giuseppe Ugazio


Does acute stress affect the trade-off between being truthful in financial decision-making and higher monetary rewards associated with acting dishonestly ?

In a new experimental study, GFRI’s Professors Rajna Gibson Brandon and  Giuseppe Ugazio, and PhD student Nina M. Sooter answer this question.

Using three separate tasks to measure honesty, they examined whether decision-making in this context is influenced by a) the intrinsic value that subjects assign to honesty, b) the size of earnings achievable dishonestly, and c) by being acutely stressed (vs. in a neutral state) when making these decisions.

Their main results show that subjects’ stated preference for honesty in general, the magnitude of financial rewards, and their interaction predict honest decision-making. However, their effects are immune to acute stress, which did not significantly alter honest decision-making.

This finding is important when one considers that many financial decisions are taken by stressed managers and that there are significant costs associated with implementing ethical policies within corporations.


The paper is bublished in the Journal of Behavioral and Experimental Finance, and is available here.

Feb 25, 2024

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