Abstract
Fraud is a pervasive and challenging problem that costs society large amounts of money. By no means all fraud is committed by ‘professional criminals’: much is done by ordinary people who indulge in small-scale opportunistic deception. In this paper, we set out to investigate when people behave dishonestly, for example by committing fraud, in an online context. We conducted three studies to investigate how the rejection of one’s efforts, operationalized in different ways, affected the amount of cheating and information falsification. Study 1 demonstrated that people behave more dishonestly when rejected. Studies 2 and 3 were conducted in order to disentangle the confounding factors of the nature of the rejection and the financial rewards that are usually associated with dishonest behavior. It was demonstrated that rejection in general, rather than the nature of a rejection, caused people to behave more dishonestly. When a rejection was based on subjective grounds, dishonest behavior increased with approximately 10%, but this difference was not statistically significant. We subsequently measured whether dishonesty was driven by the financial loss associated with rejection, or emotional factors such as a desire for revenge. We found that rejected participants were just as dishonest when their cheating did not led to financial gain. However, they felt stronger emotions when there was no money involved. This seems to suggest that upon rejection, emotional involvement, especially a reduction in happiness, drives dishonest behavior more strongly than a rational cost-benefit analysis. These results indicate that rejection causes people to behave more dishonestly, specifically in online settings. Firms wishing to deter customers and employees from committing fraud may therefore benefit from transparency and clear policy guidelines, discouraging people to submit claims that are likely to be rejected.
Highlights
Fraud is a pervasive and expensive problem: estimates of the cost of fraud vary from under 1% of GDP to over 10%, with the largest recent estimate of global fraud costs put at £7.22 trillion, or one seventh of global GDP (Gee and Button, 2013)
We have investigated whether the rejection of one’s efforts elicits dishonest behavior in an online setting
Because participants in the reject condition were rejected unfairly, we could not determine whether the rejection in itself, or the nature of the rejection caused the rise in dishonest behavior
Summary
Fraud is a pervasive and expensive problem: estimates of the cost of fraud vary from under 1% of GDP to over 10%, with the largest recent estimate of global fraud costs put at £7.22 trillion, or one seventh of global GDP (Gee and Button, 2013). A detailed study suggests that, while ‘technical’ offenses such as payment card fraud, online banking fraud, and Internet fraud have an annual cost of several 10s of pounds per citizen per year, online versions of traditional offenses such as tax and welfare fraud costs each citizen of a developed country 100s of pounds a year (Anderson et al, 2012). Motivated by the high direct and indirect costs of fraud, a wide range of countermeasures have been introduced (Alanezi and Brooks, 2014; Centre for Counter Fraud Studies, 2014) These include increasing security and surveillance, increasing awareness amongst potential victims and calling for more vigorous prosecution of fraudsters (Anderson et al, 2012; Purkait, 2012); they include measures such as blaming fraud victims for their misfortune (Cross, 2013). These measures may be rational from the viewpoint of the actors who introduce them, they do not always take the more irrational side of human nature into account
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