Lying Aversion and the Size of the Lie

60 Pages Posted: 14 Oct 2016

See all articles by Uri Gneezy

Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management

Agne Kajackaite

University of Southern California - Department of Economics

Joel Sobel

University of California at San Diego

Date Written: October 10, 2016

Abstract

This paper studies lying in a simple framework. An agent first randomly picks a number from a known distribution. She can then claim to have observed any number from the set, receiving a monetary payoff based only on her report. Consistent with previous findings, our participants do not maximize monetary payoff by making the maximal claim dishonestly. The paper posits that this behavior is the result of lying costs and discusses different kinds of lying cost. The paper presents a model of lying costs that is used to generate hypotheses regarding behavior in the experiment. In line with the model, we find that the highest fraction of lies is by reporting the maximal outcome. Reputational concerns matter: More participants lie partially when their outcomes cannot be observed by the experimenter than when the experimenter can later verify the actual outcome, and partial lying increases when the highest outcome is ex ante unlikely. In contrast, the fraction of subjects who lie does not depend on how outcomes are labeled.

Keywords: Lying, Deception, Experiments, Behavioral Economics

JEL Classification: D03, C90, C72

Suggested Citation

Gneezy, Uri and Kajackaite, Agne and Sobel, Joel, Lying Aversion and the Size of the Lie (October 10, 2016). Available at SSRN: https://ssrn.com/abstract=2852055 or http://dx.doi.org/10.2139/ssrn.2852055

Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Agne Kajackaite (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

Joel Sobel

University of California at San Diego ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
619-534-4367 (Phone)
619-534-7040 (Fax)

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