Environmental regulation seeks to limit pollution through strict emissions thresholds for existing cars, yet it remains unclear how frequently inspectors enforce these and what impact test manipulation has on policy efficacy. We demonstrate (1) a strong discontinuity in the emissions results...

Governments and other organizations often outsource activities to achieve cost savings from market competition. Yet such benefits are often accompanied by poor quality resulting from moral hazard, which can be particularly onerous when outsourcing the monitoring and enforcement of government...

Behavioral economists have proposed that incentive contracts result in higher productivity when bonuses are “loss framed”—prepaid then clawed back if targets are unmet. We test this claim in a large-scale field experiment. Holding financial incentives fixed, we randomized the pre- or...

Governments and other organizations often outsource activities to achieve cost savings from market competition. Yet such benefits are often accompanied by poor quality resulting from moral hazard, which can be particularly onerous when outsourcing the monitoring and enforcement of government...

We use experiments in high schools in two neighborhoods in the metropolitan area of Palermo, Italy to experimentally demonstrate that the historical informal institution of organized crime can undermine current institutions, even in religiously and ethnically homogeneous populations. Using trust...

Although unethical behavior often benefits third-parties not directly complicit in the misconduct, not all beneficiaries welcome these ill-gotten benefits. We investigate whether actors consider the ethical preferences of potential beneficiaries or rely solely on their own ethical...

In this paper, we explore how organizations influence the unethical behavior of their employees. Using a unique data set of over three million vehicle emissions tests, we find strong evidence of ethical spillovers from firms to individuals. When inspectors work across different organizations,...

When explaining others’ behaviors, achievements, and failures, it is common for people to attribute too much influence to the individual’s disposition and too little influence to the structural and situational influences impinging on the actor. Although performance is a joint function of...