Low-stakes opportunism

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A significant marker of a leading business school is the creation of new knowledge. Goizueta faculty, using rigorous methodologies, focus on researching important problems that affect the practice of business. The following is a sampler of recently created new knowledge.

Most people recognize that opportunistic behavior, such as lying, cheating, and stealing, is most likely to occur when the stakes are high (this is why banks are robbed). Less understood is why managers and individuals would engage in such behavior when the stakes or payoffs are low and relationships are close and trusting. Sandy Jap, Goizueta Term Chair and professor of marketing; Diana Robertson (Wharton); Aric Rindfleisch (U. Illinois at Urbana-Champaign); and Ryan Hamilton, assistant professor of marketing, develop one explanation. They find that in long-term business relationships when the stakes are low, managers will shift away from a cold calculation of costbenefit reasoning to fuzzier forms of reasoning, which the researchers call “moral malleability.” An individual might convince him- or herself that the lying or cheating is really not so bad—the consequences and pain are low, the act is victimless, or the partner would not really mind.

The manager may even conclude that the partner is already aware of the low levels of cheating taking place and tacitly approves and/or engages in it themselves. Using a series of experiments, the researchers demonstrate that the cheating and opportunism occur not only in hypothetical choices, but also in actual monetary cheating against partners. Journal of Marketing Research (2013).

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