Benefits and costs of dishonesty-World Credit Organization

1.7 Benefits and costs of dishonesty

1.7.1 Terminology conventions

1. Untrustworthy proceeds refer to the proceeds obtained by the perpetrator due to his dishonest behavior.

Second, the cost of dishonesty refers to the sum of material and spiritual costs paid by the perpetrator for his dishonesty before, during and after the event.

The chart below:

3. Opportunity cost is an economic term. The opportunity cost of something is what you give up in order to get it.

Fourth, the opportunity cost of dishonesty refers to the income of another behavior given up due to engaging in a certain dishonesty behavior. For example: a person is faced with two choices, one is to cooperate with Zhang San to sell fake medicines and obtain 10,000 yuan of income; The opportunity cost of dishonesty in counterfeit medicines.

1.7.2 Factors affecting the cost of dishonesty

1. The legal system and the implementation of the legal system have an impact on the material cost of the untrustworthy behavior before, during and after the event, but it should be noted that if the legal system excessively increases the costs, and are likely to compromise public liberty or development efficiency. Therefore, the legal system should focus on increasing the post-event cost of dishonesty, and let the dishonest pay more for covering up their dishonesty or bear more responsibility for dishonesty, instead of focusing on increasing the pre-event and mid-event costs of dishonesty.

For example: my country used to implement the legal system of company registered capital verification, which made scammers need to pay more costs when setting up a company. Entrepreneurship threshold, to a certain extent, damages the freedom of people's entrepreneurship and the efficiency of economic development.

Second, people's awareness and ability to prevent the risk of dishonesty have an important impact on the material cost of the pre-event and in-process costs of dishonesty. The stronger people's prevention awareness and prevention ability, the higher the material price to be paid for dishonesty.

3. The education level and religious belief of the person responsible for dishonesty has an important impact on the spiritual cost of the cost of dishonesty before, during and after the event. The higher the education level of a person or the nobler his religious belief, the Before, after and during the implementation of untrustworthy acts, the greater the self-torture of conscience.

Fourth, the operating efficiency of the social credit system has an important impact on the material and spiritual costs of untrustworthy behavior before, during, and after the event.

5. The value and character of the victim of the dishonesty will affect to a certain extent his determination to pursue the responsibility of the dishonesty, and it will also affect the spiritual and material costs of the dishonesty after the event. The chart below:

1.7.3 Influencing factors of the opportunity cost of dishonesty

Generally speaking, the opportunity cost of dishonesty is affected by the following factors.

1. The education level of the perpetrator. The higher the education level of the perpetrator, the more opportunities in life, and the higher the opportunity cost of engaging in untrustworthy behavior. This is also the reason why people with higher academic qualifications tend to have a stronger willingness to be honest.

Second, the degree of freedom of society. The less public power interferes with the people, the freer the society is, the more opportunities people have to climb the social ladder, and the higher the opportunity cost of engaging in dishonest behavior. Countries or regions that pursue "equal opportunity" tend to have higher levels of social integrity than those that do not.

For example: Suppose a person has the ability to sell fake clothes, start a credit company, and open a bookstore. If he sells fake clothes, he can make a profit of 50,000 yuan a year. If he starts a credit company , he can make a profit of 60,000 yuan. If he opens a bookstore with 10,000 yuan, he can make a profit of 30,000 yuan. Then, the opportunity cost of his dishonesty in selling fake clothes is 60,000 yuan. However, if the state prohibits him from starting a credit company, then his opportunity cost of breaking promises will drop to 30,000 yuan.

The above content is excerpted from "Introduction to ICE8000 Credit Knowledge" (written by Fang Bangjian, free to use, but please indicate the source)