Contagious Dishonesty: Corruption Scandals and Supermarket Theft

Is dishonest behavior contagious? We answer this question by study-ing whether corruption scandals affect the propensity of supermar-ket customers to steal while using a self-service checkout system. Crucially, this system allows shoppers to engage in dishonest behav-ior by underreporting the value of their shopping cart. Exploiting data from random audits on shoppers, we show that the probability of stealing increases by 16 percent after a local corruption scandal breaks. This effect is not driven by any change in material incen-tives. Suggestive evidence shows that it is driven by a reduction in the self-imposed cost of stealing.