Principals who exercise favouritism towards certain agents may harm those who are not so favoured. Other papers have produced evidence consistent with the presence of such favouritism but have been unable to consider methods for controlling it. We address this issue in the context of a natural...

For the first time, we present evidence on employee theft in the UK using data on actual recorded crime. We present a model where employees are ‘rational cheaters’ with ‘consciences’ to produce hypotheses about the role of labour market (wages, unemployment) and social (age, education)...