Cheating on a Budget

Bradley Ruffle and William B. Zhang

Department of Economics Working Papers from McMaster University

Abstract: Social dilemmas with a shared resource pool and privately observed entitlements are susceptible to overclaiming. A dishonest claim that exceeds one’s true entitlement imposes a negative externality on others. To explore such social dilemmas, we introduce a novel four-player game where each player rolls a die in private and earns their die report, subject to budget availability. We vary the timing of players’ reporting (simultaneous vs sequential moves) and the available budget (limited vs excess). When resources are limited, mean reports do not differ significantly between simultaneous and sequential treatments. However, simultaneous reporting promotes greater equity under scarcity and reduces dishonesty when resources are plentiful. Frequent displays of virtue signaling take place whereby Player 4 chooses to earn zero by reporting more than the remaining budget. Our results demonstrate that these social dilemmas can be better managed by promoting simultaneous reporting structures, which obscure in formation about individual claims.

Keywords: experimental economics; cheating externalities; budget constraint; virtue signaling (search for similar items in EconPapers)
JEL-codes: C90 D91 H80 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2025-07
New Economics Papers: this item is included in nep-exp, nep-gth and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2025-05

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