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Self-Fulfilling Prophecy? An Examination of Exposure to Agency Theory and Unethical Behavior

Research on Professional Responsibility and Ethics in Accounting

ISBN: 978-1-78754-973-9, eISBN: 978-1-78754-972-2

Publication date: 3 May 2018

Abstract

Commentators have claimed that business schools encourage unethical behavior by using economic theory as a basis for education. We examine claims that exposure to agency theory acts as a self-fulfilling prophecy, reducing ethical behavior among business students. We experimentally test whether economics coursework or a manipulated competitive vs. cooperative frame affects measured ethical behavior in simulated decision settings. We measure ethical behavior using established tasks. We also measure ethical recognition to test whether agency theory reduces recognition of ethical issues. Exposure to agency theory in either prior classwork or the experiment increased wealth-increasing unethical behavior. We found no effect on unethical behavior that does not affect wealth. We found no effect of exposure to agency theory on ethical recognition. Usual laboratory experiment limitations apply. Future research can examine why agency theory reduces ethical behavior. Educators ought to consider unintended consequences of the language and assumptions of theories that underlie education. Students may assume descriptions of how people behave as prescriptions for how people ought to behave. This study contributes to the literature on economic education and ethics. We found no prior experimental studies of the effect of economics education on ethical behavior.

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Citation

Mastilak, M.C., Matuszewski, L., Miller, F. and Woods, A. (2018), "Self-Fulfilling Prophecy? An Examination of Exposure to Agency Theory and Unethical Behavior", Jefrey, C. (Ed.) Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Vol. 21), Emerald Publishing Limited, Bingley, pp. 111-152. https://doi.org/10.1108/S1574-076520180000021007

Publisher

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Emerald Publishing Limited

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