Behavioral Economics

The Psychological Cost of Lying: An Experimental Investigation

Awarded External Scholars

James McGuire

Stanford University

Project Date:

April 2008

Award Amount:

$3,000

Summary

Objective:

To investigate the extent to which men and women are averse to deceiving other people.

A standard economic assumption is that people tell the truth only when it is selfishly advantageous to do so. However, recent work by Uri Gneezy shows that subjects are more likely to make a selfish choice when they choose monetary outcomes for themselves and other subjects than they are to lie to obtain that same selfish outcome.

Hypothesis:

Most people experience finite psychological costs associated with lying; and
The existence of an option to tell a big lie makes people more willing to tell a small lie.

Key Findings:

Subjects felt that a small lie was less unfair in the presence of a big lie.
More men than women were willing to lie if their gain from doing so was large enough.
When given the option, women were more likely than men to tell the big lie.
Men lied more often than women when a big lie was not an option.
No one who chose the big lie preferred the truth to the small lie.
Context appears to have had a greater impact on honesty and judgments of dishonesty for women than for men, whereas the honesty of men depended more on price.