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Deception Detection and the Role of Self-Selection

11 Pages Posted: 12 Mar 2013  

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Social Science Research Center Berlin (WZB); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Tim Lohse

Berlin School of Economics and Law; Max Planck Institute for Tax Law and Public Finance

Salmai Qari

WZB Berlin Social Science Center; Max Planck Institute for Tax Law and Public Finance

Date Written: March 2013

Abstract

We consider a lie-catching experiment with 9240 judgements. A set of videotapes shows subjects participating in a tax compliance experiment. The subjects chose whether or not to misreport. Subjects knew that underreporters were chosen for an audit with some probability. An audit led to detection and to a punishment fee. This compliance framework induced only persons with high deceptive abilities to underreport and, so, caused self-selection. Among the students who judged these videos, we find that the deception detection rate was significantly below 50 percent and even lower if the self-selection pressure in the tax compliance experiment was higher. This suggests that, when subjects can choose whether to state the truth or to lie, there is a self-selection effect by which individuals with higher deceptive ability are more likely to lie.

Keywords: Decision making, Interpersonal interaction, Judgment, Perception

JEL Classification: D83, H26

Suggested Citation

Konrad, Kai A. and Lohse, Tim and Qari, Salmai, Deception Detection and the Role of Self-Selection (March 2013). CEPR Discussion Paper No. DP9384. Available at SSRN: https://ssrn.com/abstract=2231875

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Social Science Research Center Berlin (WZB) ( email )

Reichpietschufer 50
Berlin, 10785
Germany

HOME PAGE: http://www.wzb.eu/mp/fff/people/kai_konrad.en.htm

Centre for Economic Policy Research (CEPR)

90-98 Goswell Road
London, EC1V 7RR
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

Tim Lohse

Berlin School of Economics and Law ( email )

Badensche Strasse 50-51
Berlin, D-10825
Germany

HOME PAGE: http://www.hwr-berlin.de/en/prof/tim-lohse

Max Planck Institute for Tax Law and Public Finance

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/public_economics/research_affiliates/tim_lohse.cfm

Salmai Qari

WZB Berlin Social Science Center ( email )

Reichpietschufer 50
D-10785 Berlin, 10785
Germany

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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