Homo Economicus and Fem Eticus ?

Yuval Feldman and I have been studying the behavior of individuals in the face of organizational corruption and misconduct. In our recent article, we report on a series of experiments looking at the effect of incentives on the decision to report illegality. The article The Incentives Matrix: A Study of the Comparative Effectiveness of Monetary Rewards as Compliance Systems, forthcoming, Texas Law Review (2010) report on our experimental study of a representative panel of over 2000 employees (we received a generous grant from the ABA Litigation Section Research Fund 2008-2009). The experiment compares the effects of different regulatory mechanisms – monetary rewards, protective rights, positive obligations, and liabilities – on individual  motivation and  behavior. We look at the comparative advantages of these mechanisms in incentivizing individual whistleblowing. How do women compare to men in our study? We show robust gender differences among whistleblowers, demonstrating that women  tend to respond more to  protections  and duties while men respond more to money. And in general, women in our study respond more ethically and believe that others will behave more ethically in the face of corruption. These findings are consistent with other gender differences in our previous research, such as in our article, Behavioral versus Institutional Antecedents of Decentralized Enforcement in Organizations: An Experimental Approach, Regulation & Governance, Vol. 2, No. 2, pp. 165-192, 2008, as well as in research from various disciplines and anecdotal evidence about the role of women whistleblowers in recent debacles.

Several other cool findings about the costs and benefits  of different regulatory  mechanisms: we find inadvertent counterproductive effects  of offering monetary rewards in some cases, leading to less, rather than more, reporting of illegality — in line with the behavioral  crowding out literature in the  psychology of motivation. We also find the  existence of a “holier than thou” effect, where basically all of us believe we are much more ethical than  average. We also show that  people are bad predictors of their own motivations.

–Orly Lobel

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