Why Don't People Lie? An Experimental Study of Affect Intensity and Honesty in Participative Budgeting

• In Event: Emotional Intelligence and Affect

Abstract

Research in participative budgeting documents that subordinates have significant concerns for honesty when making their reporting decisions. While the influence of honesty is widely studied and the benefits of relying on honesty in contracting are potentially high, there exists surprisingly little research investigating why agents behave honestly and whether individual differences can predict honesty. We develop and test a theory which explains why subordinates report honestly. We hypothesize that individuals experience negative affect from violating social norms, leading to a disutility. As individual’s trait negative affect intensity increases, this disutility increases, and individuals report more honestly. We test our theory using an incentivized budgeting experiment and manipulate the presence of honesty concerns. We find that individuals with higher levels of trait negative affect intensity take less budgetary slack compared to other participants when honesty concerns are activated, but not when honesty concerns are absent. The implications of our theory should apply to social norms besides honesty also, in environments where these norms are activated.

Authors

• Allen D Blay, The Florida State University

• Jeremy Douthit, The Florida State University

• Bachman P Fulmer, The Florida State University