Abstract

Honor systems are a cheap and simple way for marketing low-price goods. These sale systems are dependent on the honesty of customers and can only tolerate a certain share of free-riders. In an experimental field study, we investigate a case where honesty has almost disappeared, namely an honor system for the sale of newspapers on weekends. In the chosen urban study area, only a minority of customers comply with payment norms. In this difficult setting, we tested the use of eye images and descriptive social norms as cues to improving payment morale over a period of 24 weeks. We find that interventions based on eye cues as well as normative appeals do not evoke a transition from low to high levels of honesty. However, our results suggest that such interventions might still have the potential to marginally increase mean payments and therefore be economically profitable for operators of large-scale honor systems.