Immediate rewards prompt dishonest behavior

How can one entice people to behave more honestly? An economy where people trust each other works much better, and deals come by more easily. But if no one trusts each other, one has to post collateral for every transaction and contracts need to specify everything. One could also find ways to elicit more honest behavior from people, for example by transacting in a specific context.

Bradley Ruffle and Yossef Tobol find that providing rewards later prompts more honest behavior. This conclusion comes from a neat experiment that must have necessitated a lot of arm-twisting to realize: Israeli soldiers were allowed to roll a dice, and for every scored point they could go home a half hour earlier they day of the next release. The outcome could be observed by the experimenters, but not by their superiors. When they just returned from the previous release (Sunday), the soldiers are much more honest then when the release gets closer. This should not be surprising: as the rewards is getting more discounted further in the future, one is naturally less likely to be dishonest. The real question is whether the effect the authors identify here is stronger than discounting, factoring in that there may be hyperbolic discounting. To be honest, they look at the willingness to pay for early release, but it is negligible and seems not to corroborate the experiment results.