Sunday, November 25, 2012
" Voluntary Regulation & Ethics " by Francesca Gino - E.T. dated 17.Oct.2012
" One powerful tool, at least in theory, that policy makers can rely on , to stem cheating is - regulation through monitoring and sanctions !
But regulation will not really help, when individuals and firms who are supposed to be regulated, may have the ability to determine, how much regulation they face, or even whether they face it at all !
While monitoring and regulation can be used to combat socially costly unethical conduct, their intended targets are often able to avoid regulation or hide their behaviour.
This surrenders at least part of the effectiveness of regulatory policies to firms and individuals' decisions to voluntarily submit to regulation. We study individuals decisions to avoid monitoring or regulation and , thus, enhance their ability to engage in unethical conduct. We conduct a laboratory experiment in which partipants engage in a competitive task and can decide between having the opportunity to misreport their performance or having their performance verified by an external monitor. To study the effect of social factors on the willingness to be subject to monitoring, we vary whether participants make this decision simultaneously with others or sequentially as well as whether the decision is private or public. The opportunity to avoid being submitted to regulation produce more unethical conduct than when regulation is imposed or is absent !
