Lying for Efficiency or Fairness?

Abstract

A relationship between lying behavior and social preferences has often been proposed in explaining patterns of lying aversion (ex. Erat and Gneezy, 2012; Houser, Vetter and Winter, 2012; Maggian and Villeval, 2015). We assess subjects’ preferences over social allocation and their lying tendencies in the analogous scenarios using a novel multinomial version of a ‘mind cheating game’ (ex. Garbarino, Slonim and Villeval, 2017), which allows different degrees of lying and is independent of social image and reputation concerns. Our study allows us to observe how individual preferences over fairness and efficiency are associated with the willingness to lie for one’s self and others. Selfish and spiteful lies are prevalent among those with strong spiteful preferences in the allocation task, while those subjects with efficiency-oriented preferences tend to tell efficient lies on behalf of others. However, among those with a strong preference for fairness in allocations with own-payoff consequence, lying on behalf of fairness concerns is less apparent in the data. The empirical patterns suggest that individuals with a strong preference for efficiency in such scenarios are more likely to lie for fairness concerns, while those with a strong fairness preference may be more likely to lie out of self-interest.