Tuesday, December 09, 2014
Banking - a culture of dishonesty
Kelland points to work by Cohn et al., who have studied bank workers and other professionals in experiments in which they won more money if they cheated. They found that bankers were more dishonest when they were made particularly aware of their professional role. Employees in other sectors - manufacturing, telecoms, pharmaceuticals - did not show more dishonest behavior when their professional identity or banking-related information was emphasized. Honesty was tested by having participants toss a coin 10 times, unobserved, and report the results, knowing whether heads or tails would yield a $20 reward. They were told they could keep their winnings if they were more than or equal to those of a randomly selected subject from a pilot study. The control group reported ~50% winning tosses, and bankers who banking identity had been emphasized to them reported ~58% as wins. The authors conclude that the prevailing business culture in the banking industry weakens and undermines the honesty norm, suggesting a need for measures that re-establish an honest culture.