Economics and Finance Research Talk - 17th January 2024

Research Seminar presents the up-to-date research work in Economics and Finance topics.

The presenters invited are internals or externals. This week, we will have:

Dr.Wolfgang Luhan (University of Portsmouth)

Topic: Would I Lie for You? The Impact of Reputational Costs in Prosocial Lying

Abstract: We study experimentally whether reputational lying costs are lower when lying to benefit others. In our between-subjects design, participants draw numbered chips from an envelope, report the unverified outcome, then receive the equivalent number in GBP, giving them the opportunity to misreport the number for material benefit. Across treatments, we manipulate both the recipient of the payoff and the reputational lying costs incurred from lying, by altering the likelihood of drawing the maximum outcome by chance and hence the likelihood that maximal reports are seen as dishonest. Overall, we find that when the reputational cost of reporting maximally is higher, this is more of a deterrent for self-benefitting lies, than other-benefitting lies. While participants lied maximally for themselves when the reputational cost was lower, they shifted to partially lying when the reputational cost increased, yet we find virtually no partial lying for others regardless of the reputational cost. This indicates that participants did not try to disguise their lies for others by lying partially, suggesting they incurred less of a reputational cost from being seen as dishonest. Surprisingly, we even find that the amount of maximal lying for others decreased when the likelihood of being seen as dishonest was lower, suggesting that some participants even gained a reputational benefit from signalling their dishonesty.

For more information please contact: Wenke.Zhang@brunel.ac.uk; Matteo.Pazzona@brunel.ac.uk