Abstract:

Leaders often behave unethically to increase own and stakeholders' profits. We study gender differences in this balancing act. In a within-subjects experiment, we measure dishonest behavior when reporting own payoffs and when acting as leaders of groups. Before subjects decide for groups, they can apply for leadership. Men behave more dishonestly than women when deciding for themselves. The gender difference vanishes in groups, as women who applied for leadership increase dishonest behavior. Preferences for dishonesty explain why men apply for leadership, whereas they are not explanatory for women. In a control treatment, female leaders do not increase dishonesty for groups, when they were not able apply for leadership (exogenous assignment). A follow-up study shows that women who applied for leadership adjust their dishonest behavior to their belief on honesty preferences of group members.