Working Papers in Economics and Statistics,
Linnaeus University, School of Business and Economics, Department of Economics and Statistics

Abstract: This paper explores the contagion effects of norm-violating behavior across decision situations. Through a series of laboratory and field experiments, we empirically establish the conditions under which norm-breaking behavior in one decision situation leads individuals who observe this to violate norms in other, distinct decision situations. Our laboratory findings show that these spillover effects are more pronounced when the norms underlying the decision situations are perceived to be similar. However, spillovers can also affect decision situations governed by relatively dissimilar norms if the observers of norm violations have had the opportunity to first violate the same norm as the observed violator themselves. In an accompanying field experiment, we underscore the economic importance of norm similarity for spillover effects. When workers are exposed to information about celebrities evading taxes, they exhibit significantly higher rates of workplace theft than those in the control group, yet this exposure does not negatively affect work morale.

Keywords: Norms; Cheating; Peer Effects; Tax Evasion; Workplace Theft; Work Effort; Conditional Compliance; Unethical Behavior

JEL-codes: A12; C93; D01; D03

Language: English

65 pages, April 1, 2024

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