Dishonesty in Complex Environments: Deliberate Lies, Shortcuts, or Accidental Mistakes?

Pascal Nieder and Sven Arne Simon

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: Compliance with complex regulatory requirements can be challenging. We study why and how complexity affects non-compliance in terms of incorrect reporting. Our novelexperimental design isolates two distinct complexity effects: an increase in honest mistakes and a substantial shift toward self-serving dishonesty. We identify two mechanisms for this dishonesty shift. First, individuals with social image concerns systematically take advantage of plausible deniability. Second, we document an unexplored form of dishonesty: besides conscious lies, individuals use fraudulent shortcuts in response to complex cheating opportunities.

Keywords: Dishonest behavior; Complexity; Lying; Non-Compliance; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D83 D91 H26 K42 (search for similar items in EconPapers)
Pages: 60
Date: 2025-07
New Economics Papers: this item is included in nep-exp, nep-iue and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:mpi:wpaper:tax-mpg-rps-2024-17

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