RT Article
T1 Ethical Reasoning and the Use of Insider Information in Stock Trading
JF Journal of business ethics
VO 37
IS 2
SP 165
OP 173
A1 Abdolmohammadi, Mohammad
A1 Sultan, Jahangir
LA English
PB Springer Science + Business Media B. V
YR 2002
UL https://ixtheo.de/Record/1785617435
AB The cognitive developmental theory of ethics suggests that there is a positive relationship between ethical reasoning and ethical behavior. In this study, we trained a sample of accounting and finance students in performing competitive stock trading in our state-of-the-art trading room. The subjects then performed trading of stocks under two experimental conditions: insider information, and no-insider information where significant performance-based financial awards were at stake. We also administered the Defining Issues Test (DIT). Ethical behavior, as the dependent variable was measured in a binary scale: whether the subjects used insider information for trading of stocks or not. Ethical reasoning as measured by the DIT P-score indicated statistically significant effect on ethical behavior. The results have important implications for recruitment and training of professionals engaged in the use of financial markets for securities trading.
K1 stock trading
K1 insider information
K1 ethics reasoning
DO 10.1023/A:1015083023298