Undestanding dishonest behavior: what motivates it, how to prevent it, and how people respond to it

Abstract

Do people lie less in repeated interactions with the same partner than in a series of one-shot interactions with strangers? We find that under asymmetric information, senders lie substantially less if paired with the same receiver than when randomly re-matched with different receivers. However, the lying gap diminishes if the receiver is allowed to offer feedback to the senderWe investigate the effects of feedback on the decision to lie in a sender-receiver deception game with imperfect lie detection. We find evidence of feedback effects through two channels. First, the mere expectation of receiving feedback, including the anticipation of positive feedback and the threat of negative feedback, reduces lying. Second, actually-received feedback affects the subsequent decision to lie, but only in one situation: honest-type people who are being falsely punished with negative feedback become three times as likely to lie as those who are correctly rewarded with positive feedback. Our results indicate that the anticipation effect is the primary deterrent of lying, rather than the experience of receiving negative or positive feedback. Feedback may backfire and should be used with caution: honest-type individuals who are condemned as liars are surprised and react with moral indignation. Much of the research on lying focuses on the lie-teller, whereas the lie-receiver remains understudied. We provide an overarching view of how people respond to possible lies and articulate the motivations behind those responses. We find evidence that receivers are less likely to give negative feedback to a partner with whom they will interact repeatedly in the future than to a stranger in a one-shot game. The difference is driven by strategic responses to dishonest reports in expectation of future reciprocity.