A Texas A&M agricultural economics professor recently coauthored a multifaceted study and experiment that found cheating for fiscal gain is less about circumstance and more about character. His study also found that people may be more prone to generosity toward strangers in times of economic scarcity. 

Marco Palma, director of the Human Behavior Lab at Texas A&M University and professor in the department of agricultural economics, said Thursday that he and a colleague found evidence that, contrary to conventional wisdom, cheating is more likely caused by an individual’s propensity to cheat than via external factors.  

“In our context, cheating means misreporting something to obtain a financial benefit, either for themselves or for others,” Palma said. 

Alongside a colleague, Palma selected an isolated community in Guatemala for a field experiment to help determine whether scarcity, or impoverished situations primarily influence a person’s propensity to cheat and lie. The experiment setup gave participants the opportunity to cheat without any repercussions. 

“We found no difference in the overall level of cheating between the scarcity period or the abundance period,” Palma said. 

“We did this in Guatemala, but people have done this in over 23 countries, and there are no differences in behavior among those countries,” Palma said Thursday. “Culture seems to have very little influence, which is fascinating.” 

Palma’s coauthor on the study was Billur Aksoy, an assistant professor of economics at Rensselaer Polytechnic Institute in upstate New York. 

Palma explained that in the Guatemalan village in which they did their study, the economy centers on coffee harvesting and production. Coffee is harvested within a five-month window, Palma said, and income for the 109 participants who partook in the experiment only comes in within that window. Palma said that allowed him and Aksoy to perform the experiment twice to see if people were more honest during times of economic security than in times of financial scarcity. 

Palma said the experiment included giving participants a cup and dice, and then asking them to roll the dice inside the cup. Depending on the number rolled, participants received monetary compensation for filling out a survey. 

If a one was rolled, the participant received five quetzales, which is the equivalent of a bit less than $1. Rolling a two paid 10 quetzales, a three paid 15 quetzales, and so on. Rolling a six meant participants receiving nothing. The subjects were asked to roll the dice twice by shaking the cup.  

“The first time is the one that counts, and then they shake it again so nobody else sees what they rolled,” Palma said. “So now people have an opportunity to cheat in order to increase their earnings. We did this in the scarcity period, and again in the abundance period.”  

Palma said that an even distribution should mean that each number should come up about one-sixth of the time, so a lower payoff should show up about half the time. 

“We find that they reported about 90% of high numbers during scarcity and about 90% in abundance,” Palma explained. “So, there was no change in cheating across the two periods.” 

Palma and Aksoy estimated that in times of fiscal abundance, an average of 23% respondents were honest about their dice. During times of economic scarcity, he said, about 28% of participants were honest.

The experiment also gave people the opportunity to cheat for someone in their village, as well as for a stranger outside their community.

Palma said that, when cheating for the benefit of a member of their family or community, about 50% of participants were honest and 50% dishonest in both periods. For strangers, he said, participants were honest 90% of the time in the abundant period, but became more likely to cheat when in a leaner economic time, at a 36% dishonesty rate.

“When people get poorer, as a proportion of their income, they become more generous. That’s remarkable,” Palma said. “We see that proportional to their income, poor people tend to be more generous with their money than rich people.”

According to a Texas A&M press release, the Human Behavior Lab recently received a grant, along with Catherine Eckel and Jonathan Meer from A&M’s economics department, to continue studying cheating behavior. They plan to conduct further experiments within the United States.

“This experiment helped bridge the gap between the lab and the real world, and we can inform policy makers and make accurate predictions of how humans will react under different types of environments,” Palma said.

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