Journal of Business Ethics 145 (3):563-575 (2017)

This study examines whether truth-telling in the form of honest reporting is associated with cognitive moral development. Conventional agency theory assumes that people are self-interested and willing to tell a lie to increase their personal payoffs, while recent empirical evidence shows that some people give up monetary rewards to tell the truth. The social psychology literature suggests that cognitive moral development influences individuals’ ethical decisions. We carried out an experiment whereby participants submitted managerial reports in which truth-telling decreased their monetary payoff. Despite the fact that their decisions were not subject to monitoring, auditing, or reputation effects, some participants reported honestly or partially honestly. We find the relationship between honest reporting and cognitive moral development to be both positive and linear. Compared with those at lower stages of cognitive moral development, participants at higher stages of cognitive moral development were more likely to submit an honest report and give up potential monetary gains from lying. We further examine the economic impact of honest reporting on the firm’s profit. With the assumption of self-interest and profit maximization, Antle and Eppen suggest that a contract with a hurdle-rate feature reduces managers’ information rent. We find that in comparison with the expected outcome of a hurdle contract, the firm can yield higher profits with a trust contract by hiring managers with a P-score higher than 16.67.
Keywords No keywords specified (fix it)
Categories (categorize this paper)
DOI 10.1007/s10551-015-2834-7
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

PhilArchive copy

Upload a copy of this paper     Check publisher's policy     Papers currently archived: 64,178
External links

Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library

References found in this work BETA

Exploring Social Desirability Bias.Janne Chung & Gary S. Monroe - 2003 - Journal of Business Ethics 44 (4):291 - 302.

View all 13 references / Add more references

Citations of this work BETA

Add more citations

Similar books and articles

O związkach między rozwojem poznawczym i rozumowaniem moralnym.Dorota CZYŻOWSKA - 2013 - Argument: Biannual Philosophical Journal 3 (1):27-36.
Honesty and Intimacy in Kant’s Duty of Friendship.R. Patricia C. Flynn - 2007 - International Philosophical Quarterly 47 (4):417-424.
A New Direction for the Study of Moral Behaviour.Richard W. Wilson - 1978 - Journal of Moral Education 7 (2):122-131.


Added to PP index

Total views
16 ( #647,225 of 2,454,917 )

Recent downloads (6 months)
1 ( #449,233 of 2,454,917 )

How can I increase my downloads?


My notes