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Honest Lies

Author

Listed:
  • Li Hao

    (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)

  • Daniel Houser

    (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)

Abstract

We report data from a two-stage prediction game, where the accuracy of predictions (in the first stage) regarding die roll outcomes (in the second stage) is rewarded using a proper scoring rule. Thus, given the opportunity to self-report the die roll outcomes, participants have an incentive to bias their predictions to maximize elicitation payoffs. However, we find participants to be surprisingly unresponsive to this incentive, despite clear evidence that they cheated when self-reporting die roll outcomes. These data lend support to Akerlof's (1983) suggestion that people may prefer to appear honest without actually being honest. In particular, the vast majority (95%) of our subjects were willing to incur a cost to preserve an honest appearance. At the same time, only 44% exhibited intrinsic preference for honesty. Moreover, we found that after establishing an honest appearance people cheat to the greatest possible extent. These results suggest that "incomplete cheating" behavior frequently reported in the literature can be attributed more to a preference for maintaining appearances than an intrinsic aversion to maximum cheating.

Suggested Citation

  • Li Hao & Daniel Houser, 2011. "Honest Lies," Working Papers 1021, George Mason University, Interdisciplinary Center for Economic Science.
    • Handle: RePEc:gms:wpaper:1021
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Houser, Daniel & Vetter, Stefan & Winter, Joachim, 2012. "Fairness and cheating," European Economic Review, Elsevier, vol. 56(8), pages 1645-1655.
    2. Gill, David & Prowse, Victoria & Vlassopoulos, Michael, 2013. "Cheating in the workplace: An experimental study of the impact of bonuses and productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 120-134.
    3. Rosaz, Julie & Villeval, Marie Claire, 2012. "Lies and biased evaluation: A real-effort experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 537-549.
    4. Besancenot, Damien & Dubart, Delphine & Vranceanu, Radu, 2013. "The value of lies in an ultimatum game with imperfect information," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 239-247.
    5. Utikal, Verena & Fischbacher, Urs, 2013. "Disadvantageous lies in individual decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 108-111.
    6. repec:hal:journl:hal-00692139 is not listed on IDEAS
    7. Ville Korpela, 2017. "All Deceptions Are Not Alike: Bayesian Mechanism Design with a Social Norm against Lying," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(2), pages 376-393, June.
    8. Damien Besancenot & Delphine Dubart & Radu Vranceanu, 2012. "The value of lies in a power-to-take game with imperfect information," Working Papers hal-00690409, HAL.
    9. repec:hal:journl:hal-00690409 is not listed on IDEAS
    10. Damien Besancenot & Delphine Dubart & Radu Vranceanu, 2012. "The value of lies in a power-to-take game with imperfect information," CEPN Working Papers hal-00690409, HAL.

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    More about this item

    Keywords

    cheating; honest appearance; partial cheating; experimental design;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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