Is It a Lie if I Don't Know? Self-Serving Dishonesty Under Ignorance

Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2020-12

57 Pages Posted: 23 Dec 2020 Last revised: 7 Mar 2024

See all articles by Sven A. Simon

Sven A. Simon

Max Planck Institute for Tax Law and Public Finance

Date Written: December 21, 2020

Abstract

Ignorance of facts and laws may provide an excuse for self-serving reporting behavior, even when it comes at the risk of telling the untruth. This paper studies what decision-makers report when they do not know their true entitlement to a financial gain, and why they do so. In a theory-guided experiment, I show that ignorance of one's true entitlement leads to a pronounced increase in self-serving but untruthful reporting behavior. Two factors determine the reporting decision under ignorance: (i) the decision-maker's belief of the true entitlement and (ii) the absence of a commonly accepted social norm. However, the scope of ignorance as an excuse is limited. Most individuals seek information on their true entitlement to the financial gain once they have the opportunity to do so. Complementary survey evidence highlights the prevalence of uninformed reporting decisions in the field and provides additional insights on behavioral motivations.

Keywords: lying behavior, unjustied claiming, ignorance, information avoid-ance, laboratory experiment

JEL Classification: C91, D83, D91, K42

Suggested Citation

Simon, Sven A., Is It a Lie if I Don't Know? Self-Serving Dishonesty Under Ignorance (December 21, 2020). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2020-12, Available at SSRN: https://ssrn.com/abstract=3752722 or http://dx.doi.org/10.2139/ssrn.3752722

Sven A. Simon (Contact Author)

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

Marstallplatz 1
Munich, 80539
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
25
Abstract Views
775
PlumX Metrics