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Honest Lies

Li Hao () and Daniel Houser ()
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Li Hao: Interdisciplinary Center for Economic Science and Department of Economics, George Mason University

No 1021, Working Papers from George Mason University, Interdisciplinary Center for Economic Science

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.

Keywords: cheating; honest appearance; partial cheating; experimental design (search for similar items in EconPapers)
JEL-codes: C91 D03 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-hpe
Date: 2011-03
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