Abstract
Trust in others’ honesty is a key component of the long-term performance of firms, industries, and even whole countries1,2,3,4. However, in recent years, numerous scandals involving fraud have undermined confidence in the financial industry5,6,7. Contemporary commentators have attributed these scandals to the financial sector’s business culture8,9,10, but no scientific evidence supports this claim. Here we show that employees of a large, international bank behave, on average, honestly in a control condition. However, when their professional identity as bank employees is rendered salient, a significant proportion of them become dishonest. This effect is specific to bank employees because control experiments with employees from other industries and with students show that they do not become more dishonest when their professional identity or bank-related items are rendered salient. Our results thus suggest that the prevailing business culture in the banking industry weakens and undermines the honesty norm, implying that measures to re-establish an honest culture are very important.
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Acknowledgements
We thank the participating bank, the alumni network organizations of three education programmes, and the municipal office for enabling the research; G. Akerlof and D. Ariely for critical discussions; C. Efferson, T. Herz and S. Gschwend for reading of the manuscript; and D. Bigliel and M. Brunner for research assistance. Financial support from the European Research Council Grant “Foundations of Economic Preferences” and the Gottlieb Duttweiler Institute is gratefully acknowledged.
Author information
Author notes
- Alain Cohn
- & Michel André Maréchal
These authors contributed equally to this work.
Affiliations
Department of Economics, University of Zurich, 8006 Zurich, Switzerland
- Alain Cohn
- , Ernst Fehr
- & Michel André Maréchal
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Contributions
A.C. and M.A.M. developed the research idea; A.C., E.F. and M.A.M. designed the study; A.C. and M.A.M. conducted the experiments, and analysed data. A.C., E.F. and M.A.M. wrote the manuscript.
Competing interests
The authors declare no competing financial interests.
Corresponding authors
Correspondence to Alain Cohn or Ernst Fehr or Michel André Maréchal.
Extended data
Extended data figures
- 1.
The impact of professional identity on bank employees’ intrinsic competitiveness.
- 2.
Bank employees’ beliefs about other bank employees’ percentage of successful coin flips.
- 3.
Distribution of earnings in the coin tossing task claimed by the non-banking employees.
- 4.
Distribution of earnings in the coin tossing task claimed by the students.
- 5.
Gallup survey of honesty standards of people in the banking industry.
Supplementary information
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Supplementary Information
This file contains Supplementary Methods, Supplementary Analysis, Supplementary Robustness Checks, Supplementary Materials, Supplementary Tables 1-8 and additional references.
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