Incentive Effects on Ethics

[Excerpt] Virtually all organizations use incentives of some type. All-too-often, though, the best of intentions engender negative results, ranging from minor infractions (e.g., overstating performance results) to major disasters (e.g., widely publicized corporate scandals). Naturally, this piques the interest of researchers (as well as journalists and regulators). Why are incentives so conducive to wrongdoing? What have we learned that might improve the situation going forward?