Dealing with Opportunism: Experimental Investigations of Measures against Dishonest Behavior

This dissertation aims at investigating whether and how distinct measures that are supposed to foster honest behavior work. It consists of three separate papers, in which I analyze the effectiveness and mechanisms of such measures on the basis of several laboratory experiments. Chapter 2 is dedicated to analyzing and comparing the effectiveness of distinct measures that are supposed to prevent people from lying for financial gain. Chapter 3 introduces a novel experimental design that allows the measurement of the size of the lie, the size of mistrust, and respective first-order beliefs in a two-player relationship of strategic interaction. Chapter 4 explores the mechanisms behind the effects of an honesty oath by analyzing its impact on moral deliberation and strategic decision making. Chapter 2, titled “Can honesty oaths, peer interaction, or monitoring mitigate lying?”, reports on several new variants of the dice experiment of Fischbacher and Föllmi-Heusi (2013) to investigate measures to reduce lying. We find that groups of two subjects lie at least to the same extent as individuals – even in a novel treatment in which one subject is instructed (and paid independently) to monitor the other. It also seems that subjects hardly lie when lying is only beneficial to others and not to themselves, even if the involved players are in a reciprocal relationship. Finally, we find that an honesty oath performs better in terms of lie mitigation compared to the four-eyes principle and monitoring. Chapter 3, titled “Size matters! Lying and Mistrust in the Continuous Deception Game”, presents a new experiment to measure lying and mistrust as continuous variables on an individual level. This experiment is a sender-receiver game framed as an investment game. It features two players: firstly, an advisor with complete information (i.e., the sender) who is incentivized to lie about the true value of an optimal investment and, secondly, an investor with incomplete information (i.e., the receiver) who is incentivized to invest optimally and therefore must rely on the alleged optimum reported by the advisor. The continuous message space allows observing more differentiated behavior and therefore enables testing of more sophisticated theoretical predictions. While the senders seem to make strategic considerations about their own potential to manipulate others based on the size of the lie, the receivers appear to have some endogenous preference for trust. I also find that the size of the lie and the size of mistrust do not only matter from a strategic perspective but also have an impact on how people perceive their own behavior. My findings support the conjecture that lying costs increase with the size of the lie. Chapter 4, titled “Quick, intuitive truth-telling and deliberate, strategic lying under oath”, investigates how oath-taking works when lying requires strategic thinking. The analysis is based on the experimental design developed in Chapter 3 and focuses on the effects of an honesty oath on deliberation time, strategic decision making, and the temporal consistency of (dis)honest behavior. On the upside, the honesty oath seems to work by making the decision to tell the truth less deliberate and more intuitive. On the downside, I observe that people who lie under oath barely reduce the sizes of their lies. In fact, my results indicate that the act of lying becomes more deliberate and strategic due to the oath. Finally, I provide evidence that oath-taking makes both the oath-takers’ lying and truth-telling behavior more consistent over time. This suggests that an honesty oath encourages the oath-takers to make one basic decision whether to commit to unconditional truth-telling or to deliberately accept being dishonest for personal financial gain.