UC San Diego

Mistakes and overconfidence in detecting lies could help lies spread. Participants in our experiments observe videos in which senders either tell the truth or lie, and are incentivized to distinguish between them. We find that participants fail to detect lies, but are overconfident about their ability to do so. We use these findings to study the determinants of sharing and its effect on lie detection, finding that even when incentivized to share truthful videos, participants are more likely to share lies. Moreover, the receivers are more likely to believe shared videos. Combined, the tendency to believe lies increases with sharing. (JEL C91, D83, D91, L82)