Citation:
[Journal:] Economic Inquiry [ISSN:] 1465-7295 [Volume:] 58 [Issue:] 4 [Publisher:] Wiley Periodicals, Inc. [Place:] Boston, USA [Year:] 2020 [Pages:] 1689-1706
Publisher:
Wiley Periodicals, Inc., Boston, USA
Abstract:
In this paper, we investigate how payment procedures that are deemed unfair can spur unethical behavior towards innocent coworkers in a real-effort experiment. In our Discrimination treatment, a highly unfair payment procedure with wage differentials, half the workforce is randomly selected and paid by relative performance whereas the remaining receives no payment. A joy-of-destruction game measures unethical behavior subsequently. Non-earners in Discrimination destroy significantly more than in the non-discriminatory control treatments. In Discrimination, unethical behavior is generally high for all non-earners, independent of individual inequality aversion and relative performance beliefs. In the control treatments, inequality aversion is the main driver of destructive behavior. (JEL C91, D03, J33, J70, M52)