Behavioral economics and monetary wisdom: A cross-level analysis of monetary aspiration, pay (dis)satisfaction, risk perception, and corruption in 32 nations

Abstract

Corruption involves greed, money, and risky decision-making. We explore the love of money, pay satisfaction, probability of risk, and dishonesty across cultures. Avaricious monetary aspiration breeds unethicality. Prospect theory frames decisions in the gains-losses domain and high-low probability. Pay dissatisfaction (in the losses domain) incites dishonesty in the name of justice at the individual level. The Corruption Perceptions Index, CPI, signals a high-low probability of getting caught for dishonesty at the country level. We theorize that decision-makers adopt avaricious love-of-money aspiration as a lens and frame dishonesty in the gains-losses domain (pay satisfaction-dissatisfaction, Level 1) and high-low probability (CPI, Level 2) to maximize expected utility and ultimate serenity. We challenge the myth: Pay satisfaction mitigates dishonesty across nations consistently. Based on 6500 managers in 32 countries, our cross-level three-dimensional visualization offers the following discoveries. Under high aspiration conditions, pay dissatisfaction excites the highest- (third-highest) avaricious justice-seeking dishonesty in high (medium) CPI nations, supporting the certainty effect. However, pay satisfaction provokes the second-highest avaricious opportunity-seizing dishonesty in low CPI entities, sustaining the possibility effect-maximizing expected utility. Under low aspiration conditions, high pay satisfaction consistently leads to low dishonesty, demonstrating risk aversion-achieving ultimate serenity. We expand prospect theory from a micro and individual-level theory to a cross-level theory of monetary wisdom across 32 nations. We enhance the S-shaped Curve to three 3-D corruption surfaces across three levels of the global economic pyramid, providing novel insights into behavioral economics, business ethics, the environment, and responsibility.