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Liar Liar: Experimental Evidence of the Effect of Confirmation‐Reports on Dishonesty

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  • Denvil Duncan
  • Danyang Li

Abstract

We identify the effect of confirmation‐reports on dishonesty using data from an experiment where subjects are asked to roll a die and report its outcome using either a self‐report or confirmation‐report mechanism. We find that relative to self‐reports, confirmation‐reports have a positive effect on the share of subjects who report honestly. The effect on the magnitude of lies told depends greatly on the accuracy of the prefilled information on the confirmation‐report. We argue that these results are driven by changes in the intrinsic costs of lying induced by the confirmation report.

Suggested Citation

  • Denvil Duncan & Danyang Li, 2018. "Liar Liar: Experimental Evidence of the Effect of Confirmation‐Reports on Dishonesty," Southern Economic Journal, John Wiley & Sons, vol. 84(3), pages 742-770, January.
  • Handle: RePEc:wly:soecon:v:84:y:2018:i:3:p:742-770
    DOI: 10.1002/soej.12244
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    1. van Dijk, Wilco W. & Goslinga, Sjoerd & Terwel, Bart W. & van Dijk, Eric, 2020. "How choice architecture can promote and undermine tax compliance: Testing the effects of prepopulated tax returns and accuracy confirmation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 87(C).
    2. Ellen Garbarino & Robert Slonim & Marie Claire Villeval, 2019. "Loss aversion and lying behavior," Post-Print halshs-01981542, HAL.
    3. William G. Morrison & Bradley J. Ruffle, 2020. "Insurable losses, pre-filled claims forms and honesty in reporting," Working Paper series 20-18, Rimini Centre for Economic Analysis.
    4. Garbarino, Ellen & Slonim, Robert & Villeval, Marie Claire, 2019. "Loss aversion and lying behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 379-393.
    5. Lilleholt, Lau & Schild, Christoph & Zettler, Ingo, 2020. "Not all computerized cheating tasks are equal: A comparison of computerized and non-computerized versions of a cheating task," Journal of Economic Psychology, Elsevier, vol. 78(C).
    6. Martin Fochmann & Frank Hechtner & Tobias Kölle & Michael Overesch, 2021. "Combating overreporting of deductions in tax returns: prefilling and restricting the deductibility of expenditures," Journal of Business Economics, Springer, vol. 91(7), pages 935-964, September.
    7. Siamand Hesami & Hatice Jenkins & Glenn P. Jenkins, 2024. "Digital Transformation of Tax Administration and Compliance: A Systematic Literature Review on E-Invoicing and Prefilled Returns," Development Discussion Papers 2023-14, JDI Executive Programs.
    8. William G. Morrison & Bradley J. Ruffle, 2024. "Do higher insurance premiums provoke larger reported losses? An experimental study," Department of Economics Working Papers 2024-05, McMaster University.

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