Lying on Two Dimensions and Moral Spillovers

Abstract

The expanding literature on lying has exclusively considered lying behavior within a one-dimensional context. While this has been an important first step, many real-world contexts involve the possibility of simultaneously lying in more than one dimension (e.g., reporting one's income and expenses in a tax declaration). In this paper, we experimentally investigate individual lying behavior in both one-and two-dimensional contexts to understand whether the multi-dimensionality of a decision affects lying behavior. In the one-dimensional treatment, participants are asked to roll two dice in one hand and to report the sum of both dice. In the two-dimensional treatment, participants are asked to roll two dice at the same time, but one in each hand, and to report the two dice separately. Our paper provides the first evidence regarding lying behavior in a multi-dimensional context. Using a two-dimensional die-roll task, we show that participants lie partially between dimensions, which results in greater overreporting of the lower outcome die. These findings suggest a thought-provoking policy to tackle the infamous societal challenge of tax fraud: Tax report checks should focus on the item(s) for which a taxpayer profile hints at higher self-benefits in case of misreporting.

The effect of observing multiple private information outcomes on the inclination to cheat

“…In contrast, when the behavior is directly observed by the experimenter the fewer subjects who lie (and therefore who do not care about their social image) tend to do so to the maximum extent. Similarly,Abeler et al (2019) find that direct observability strongly reduces cheating.4 Only in case the cost refers to the observation of each single realization of the stochastic component rather than to the report of the cumulative result, the intrinsic cost of cheating would be higher under multiple realizations because the fixed cost would be paid repeatedly.5 For the sake of comparability across treatments subjects report only one outcome (the sum) even when observing multiple realizations Geraldes et al (2019). show that manipulating the number of outcomes reported given the same number of realizations observed does not alter the choices significantly.6 The alternative of paying one outcome at random in the repeated task is not viable for two reasons.…”

“…Geraldes et al. (2019) show that manipulating the number of outcomes reported given the same number of realizations observed does not alter the choices significantly.…”

The Effect of Observing Multiple Private Information Outcomes on the Inclination to Cheat

“…As economists, we are ready to reject a null hypothesis (honest behavior in this case) only when the probability of type I error is sufficiently small.12 The thresholds that identify a dishonest behavior in 10-Uniform and 1-Normal depend on the confidence level, and in any case the formula to compute them is complex. Since we cannot expect the subjects to know it, in Section 3 we analyze lying behavior using a range of thresholds.13 In all the conditions subjects report only one outcome, either the single draw (1-Uniform and 1-Normal) or the sum of the realizations 10-Uniform Geraldes et al (2019). show that manipulating the number of outcomes…”