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Cheating and Loss Aversion: Do People Lie More to Avoid a Loss?

22 Pages Posted: 30 Sep 2014  

Gilles Grolleau

Montpellier SupAgro and Researcher at LAMETA

Martin G. Kocher

Ludwig Maximilian University of Munich - Faculty of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Göteborg University - School of Business, Economics and Law; Queensland University of Technology - School of Economics and Finance

Angela Sutan

Burgundy School of Business - CEREN, ESC Dijon

Date Written: September 29, 2014

Abstract

Does the extent of cheating depend on a proper reference point? We use a real effort task that implements a two (gain versus loss frame) times two (monitored performance versus unmonitored performance) between-subjects design to examine whether cheating is reference-dependent. Our experimental findings show that self-reported performance in the unmonitored condition is significantly higher than actual performance in the monitored condition — a clear indication for cheating. However, the level of cheating is by far higher in the loss frame than in the gain frame. Furthermore, men are much more strongly affected by the framing than women.

Keywords: cheating, lying, loss aversion, experiment

JEL Classification: C910, D030

Suggested Citation

Grolleau, Gilles and Kocher, Martin G. and Sutan, Angela, Cheating and Loss Aversion: Do People Lie More to Avoid a Loss? (September 29, 2014). CESifo Working Paper Series No. 4965. Available at SSRN: https://ssrn.com/abstract=2502819

Gilles Grolleau

Montpellier SupAgro and Researcher at LAMETA ( email )

France

Martin G. Kocher (Contact Author)

Ludwig Maximilian University of Munich - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

Göteborg University - School of Business, Economics and Law ( email )

Vasagatan 1
Goteborg, 40530
Sweden

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Angela Sutan

Burgundy School of Business - CEREN, ESC Dijon ( email )

29 rue Sambin
Dijon, 21006
France

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