Business culture and dishonesty in the banking industry.

Trust in others' honesty is a key component of the long-term performance of firms, industries, and even whole countries. However, in recent years, numerous scandals involving fraud have undermined confidence in the financial industry. Contemporary commentators have attributed these scandals to the financial sector's business culture, but no scientific evidence supports this claim. Here 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. This effect is specific to bank employees because control experiments with employees from other industries and with students show that they do not become more dishonest when their professional identity or bank-related items are rendered salient. Our results thus suggest that the prevailing business culture in the banking industry weakens and undermines the honesty norm, implying that measures to re-establish an honest culture are very important.

Increasing honesty in humans with noninvasive brain stimulation.

Honesty plays a key role in social and economic interactions and is crucial for societal functioning. However, breaches of honesty are pervasive and cause significant societal and economic problems that can affect entire nations. Despite its importance, remarkably little is known about the neurobiological mechanisms supporting honest behavior. We demonstrate that honesty can be increased in humans with transcranial direct current stimulation (tDCS) over the right dorsolateral prefrontal cortex. Participants (n = 145) completed a die-rolling task where they could misreport their outcomes to increase their earnings, thereby pitting honest behavior against personal financial gain. Cheating was substantial in a control condition but decreased dramatically when neural excitability was enhanced with tDCS. This increase in honesty could not be explained by changes in material self-interest or moral beliefs and was dissociated from participants' impulsivity, willingness to take risks, and mood. A follow-up experiment (n = 156) showed that tDCS only reduced cheating when dishonest behavior benefited the participants themselves rather than another person, suggesting that the stimulated neural process specifically resolves conflicts between honesty and material self-interest. Our results demonstrate that honesty can be strengthened by noninvasive interventions and concur with theories proposing that the human brain has evolved mechanisms dedicated to control complex social behaviors.

Civic honesty around the globe.

Civic honesty is essential to social capital and economic development but is often in conflict with material self-interest. We examine the trade-off between honesty and self-interest using field experiments in 355 cities spanning 40 countries around the globe. In these experiments, we turned in more than 17,000 lost wallets containing varying amounts of money at public and private institutions and measured whether recipients contacted the owners to return the wallets. In virtually all countries, citizens were more likely to return wallets that contained more money. Neither nonexperts nor professional economists were able to predict this result. Additional data suggest that our main findings can be explained by a combination of altruistic concerns and an aversion to viewing oneself as a thief, both of which increase with the material benefits of dishonesty.