Abstract

Essays on Deception and Lying Aversion

By

Glynis Margaret E. Gawn

Doctor of Philosophy in Agricultural and Resource Economics

University of California, Berkeley

Professor Jeffrey M. Perloff, Chair

This dissertation consists of three experimental essays on deception and lying aversion. Chapter 2, “Do Lies Erode Trust?” studies the interaction between honesty and trust and trustworthiness. Specifically, the chapter investigates the effect of being lied to or told the truth in a Gneezy (2005) deception game on behavior in a subsequent trust game with different players. Treatment effects are decomposed between the impacts of being “burned” by a low payoff in the deception game, mood change, and the specific experience of a lie. The specific experience of being lied to significantly erodes trust, trustworthiness, and the use of communication to promote trust. However, the experience effect on trustworthiness occurs only for subjects who are burned.

Chapter 3, “Pure Lying Aversion”, studies several factors affecting the propensity to tell the truth when no one would be directly negatively impacted by the lie. Utilizing a simple experiment, the effect of the strength of the message one is using to convey information is examined, while the economic incentive to lie is also varied. The effect of being lied to in a prior interaction on one’s subsequent truthfulness is also studied in a separate set of experiments. The strength of the message has a strong effect on truthfulness regardless of the incentive to lie, while the effect of the size of the economic gain from lying has a non-monotonic effect on truthfulness. Additionally, the effect of knowledge about whether one has been lied to before interacts with the payoff outcome received in the prior interaction to reduce truthfulness in some cases and increase it in others.

Chapter 4, “Lying Through Others”, considers the question of how agency relationships, ubiquitous in economic interactions, affect an individual’s willingness to lie for monetary advantage? Does individual lying aversion tend to decline if the lie (or truth) is sent through an agent, rather than sent directly by the individual? In three experiments that control for the effects of delegation on preferences over payoffs and probabilities of actions, it is found that delegation reduces – but does not eliminate – lying aversion.