Pigors, Mark and Rockenbach, Bettina ORCID: 0000-0003-2624-1964
(2016).
The competitive advantage of honesty.
Eur. Econ. Rev., 89.
S. 407 - 425.
AMSTERDAM:
ELSEVIER SCIENCE BV.
ISSN 1873-572X
Abstract
We study competitive markets where firms may lie to their workers to reduce costs. Consumers may benefit from firms' dishonesty through lower market prices. Does firms' (dis-)honesty affect consumers' purchasing decisions? Our experiment shows that when honesty is fully transparent, it can provide a competitive advantage: Honest firms sell more and - despite higher costs - achieve higher profits. This finding is in line with our equilibrium predictions when allowing for dishonesty-averse consumers. By identifying circumstances in which consumers - although not the addressee of dishonesty - punish firms for their within-firm dishonesty, we contribute both to behavioral ethics and behavioral industrial organization. (C) 2016 Elsevier B.V. All rights reserved.
Item Type: | Journal Article | ||||||||||||
Creators: |
|
||||||||||||
URN: | urn:nbn:de:hbz:38-259287 | ||||||||||||
DOI: | 10.1016/j.euroecorev.2016.09.001 | ||||||||||||
Journal or Publication Title: | Eur. Econ. Rev. | ||||||||||||
Volume: | 89 | ||||||||||||
Page Range: | S. 407 - 425 | ||||||||||||
Date: | 2016 | ||||||||||||
Publisher: | ELSEVIER SCIENCE BV | ||||||||||||
Place of Publication: | AMSTERDAM | ||||||||||||
ISSN: | 1873-572X | ||||||||||||
Language: | English | ||||||||||||
Faculty: | Faculty of Management, Economy and Social Sciences | ||||||||||||
Divisions: | Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Economics > Microeconomics, Institutions and markets > Professorship for Experimental and Behavioral Economics Faculty of Management, Economics and Social Sciences > Economics > Microeconomics, Institutions and markets > Reinhard Selten Institute |
||||||||||||
Subjects: | Economics | ||||||||||||
Uncontrolled Keywords: |
|
||||||||||||
Refereed: | Yes | ||||||||||||
URI: | http://kups.ub.uni-koeln.de/id/eprint/25928 |
Downloads
Downloads per month over past year
Altmetric
Export
Actions (login required)
![]() |
View Item |