Can Money Buy Your Morals?


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published July 17, 2019

Classical economics assumes that our rational self-interest will guide our decision making.

The first part of that assumption, the “rational” part, was proven to be a premise needing clarification by the work of Kahneman and Tversky in their 1979 paper on Prospect Theory. This seminal work led to an entirely new branch of economics, best known as behavioral economics, which was further popularized by the works of Ariely, Shiller, Thaler, and many others.

Now the second part of that assumption, the “self-interest” part, is being called into question.

Classical economic thinking implies that providing increasing incentives to “do something” increases the likelihood that you will do it.  What if that something is dishonest?  Will increasing the incentive to be dishonest result in increased dishonesty?  In effect, classical economic theory is making a claim that self-interest will always eventually dominate over other motivations – such as morals – and that there is a price on everything, even honesty.

To test this assumption, Cohn et. al conducted a massive “lost wallet” study.  The results of their findings are surprising.

Money and Morals: Can Price Affect Ethics in Decision Making?

The Lost Wallet Measurement

The ruse

In the study, research assistants pretended to be tourists that found a wallet and wanted to drop it off with a responsible local person so that it could be returned to the proper owner. In the ruse, the “responsible local person” was a person at the front desk of a hotel, theater, museum, post office, police station or public office.

The research assistant would approach the front-desk personnel and state: “Hi, I found this [pointing to the wallet] on the street around the corner.” The research assistant would then place the wallet on the counter and push it over to the employee, saying, “Somebody must have lost it. I’m in a hurry and have to go. Can you please take care of it?”  The research assistant would then exit the building.

At this point, the front-desk personnel could either attempt to contact the “owner” of the wallet and return it or choose to pocket the cash, discard the wallet, and go about their business.

The wallet

The wallets were pre-prepared to contain either no money, a small amount ($13.45), or a larger sum ($94.15) along with a grocery list, a key, and three identical business cards with the fictitious owner’s name, title, and email address. The actual value per wallet was varied proportionately to the purchasing power of the country and the cash was denominated in the local currency.

In all, the wallet experiment was repeated in 355 cities across 40 countries with 17,303 wallets.

The Response of Honesty or Self-interest?

Wallets that held money in them were more likely to be returned intact than those without money.  Statistically, wallets without money were returned 40% of the time while wallets with money were returned 51% of the time. This observation was consistent across 38 out of 40 countries. And, where the monetary value increased, the return rates increased.

Economics Loses Another Assumption

These results are in direct conflict with classic economics.

The study shows that increasing monetary incentives to be dishonest resulted in increasing honesty, not dishonesty. This is the opposite outcome of the classical assumption that greed will always eventually overwhelm our better natures when the opportunity to benefit increases. It is a clear demonstration that, in some situations, self-interest is secondary in guiding decision making.

From a moral philosophy viewpoint, I am delighted to see our better angels overcome economic incentives. And, this result is aligned with Amartya Sen’s discussion on multiple forms of justice. The study implies that money can’t make a person compromise their morals, but compromised morals are often revealed by money.

From an applied economics viewpoint, this presents a challenge. Rational self-interest has been repeatedly demonstrated to be a good predictor of decision making. Here, however, it wasn’t. If clear and repeatable observation fails to match theory, then the theory must need to be updated. This isn’t to say that economics is useless and always wrong, but rather indicates the need to continue exploring this field in order to refine our assumptions and knowledge.

Fortunately, from my vantage point as a pricing professional, I know that not only will I not put a price tag on compromising someone’s morals, but that doing so is fortunately not possible.


Alain Cohn, Michel André Maréchal, David Tannenbaum, Christian Lukas Zünd; “Honesty and selfishness across cultures”; Science 05 Jul 2019: 70-73.

About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.