Abstract
We investigate the effects of feedback on the decision to lie in a sender-receiver deception game with imperfect lie detection. We find evidence of feedback effects through two channels. First, the mere expectation of receiving feedback, including the anticipation of positive feedback and the threat of negative feedback, reduces lying. Second, actually-received feedback affects the subsequent decision to lie, but only in one situation: honest-type people who are being falsely punished with negative feedback become three times as likely to lie as those who are correctly rewarded with positive feedback. Our results indicate that the anticipation effect is the primary deterrent of lying, rather than the experience of receiving negative or positive feedback. Feedback may backfire and should be used with caution: honest-type individuals who are condemned as liars are surprised and react with moral indignation.
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