After each financial crisis bankers were often accused of their dishonesty. However, no scientific study showing that individuals working in the banking industry are not reliable was available until now. Results of a new research carried out by world-famous economist Ernst Fehr and his colleagues at the University of Zürich reveal that banking industry ‘corrupts’ people.
“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,” authors of the study published in Nature claim.
It is popular to claim that people working in the banks become cheaters. However, it is pretty difficult to verify this claim. In order to do, it is not enough to show that employees of financial institutions are less moral than workers of other industries. It might be that the bad guys select different career paths than the good guys.
“We take a novel approach that is inspired by the economic theory of identity, which proposes that individuals have multiple social identities based on, for example, gender, ethnicity or profession. Identities are associated with specific social norms prescribing permissible behaviours. Which identity and associated norms are behaviourally relevant depends on the relative weight an individual attributes to an identity. In a given situation, behaviour is shifted towards those norms that are associated with the more salient identity,” Fehr and his colleagues explain.
They analyzed behavior of 128 bank employees who had long working experience. Respondents were asked to perform so called coin tossing task, in which they unanimously tossed a coin 10 times. The size of their reward depended on the number of “tales” and “heads”. Participants had to report their results online. “We can detect dishonesty at the group level by comparing the reported fraction of successful outcomes with the 50% benchmark implied by honest reporting,” the economists say.
Study showed that when bankers were primed with their professional identity, they become more dishonest. In addition, researchers demonstrated that representatives of other fields do not become more dishonest when they are primed with their professional identities. “The data do not support the hypothesis that money salience drives the professional identity effect. The banking questions had no significant influence on dishonesty in students,” the scholars add.
Article: Cohn A., Fehr E. and Marechal M.A., 2014, Business culture and dishonesty in the banking industry, Nature, 516, 86–89, source link.