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Pecunia Non Olet: on the Self-selection Into (Dis)honest Earning Opportunities

Kai Konrad (), Tim Lohse and Sven Simon ()

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

Abstract: We study self-selection into earning money in an honest or dishonest fashion based on individuals' attitudes toward truthful reporting. We propose a decision-theoretic framework where individuals' willingness to pay for honest earnings is determined by their (behavioral) lying costs. Our laboratory experiment identifies lying costs as the decisive factor causing self-selection into honest earning opportunities for individuals with high costs and into cheating opportunities for those prepared to misreport. Our experimental setup allows us to recover individual lying costs and their distribution in the population.

Keywords: lying behavior; lying costs; misreporting; honest earnings; self-selection; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C91 D81 D91 K42 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2020-11
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-lab
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Citations: View citations in EconPapers (5) Track citations by RSS feed

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