Bad bankers no more? Truth-telling and (dis)honesty in the finance industry

Arbeitspapier

Worries about unethical behavior are a recurring issue in the finance industry, which has inspired a number of recent studies. We contribute to this ongoing discussion by investigating preferences for truthfulness within the finance industry in a controlled experiment with 415 financial professionals (and 270 students as a control group). Participants have to report one of two numbers, of which one is true, the other false, and where truth-telling is costly. In three main treatments we vary the situational context of subjects' decisions (abstract, neutral, finance context) by applying differently framed instructions. We find that contexts matter for financial professionals: they act more honestly in a financial context, while for a control group we find no such differences. Further variations on the financial decision situation do not worsen financial professionals' honesty. As driver of the observed behavior we find reputational concerns to play a major role in financial professionals' decisions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2020-03

Classification and Topics

• Classification: Wirtschaft ; Relation of Economics to Social Values ; Design of Experiments: Laboratory, Individual ; Micro-Based Behavioral Economics: General‡ ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡
• Subject: dishonesty ; cheating ; financial professionals ; framing ; context-dependence ; experiment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Huber, Christoph ; Huber, Jürgen
• Event: Veröffentlichung
• (who): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (where): Innsbruck
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/238227
• Last update: 10.03.2025, 11:43 AM CET