Lie o’clock: Experimental evidence on intertemporal lying preferences

Abstract

In lying utility models, benefits and costs typically occur presently and simultaneously. However, lying and its products often develop asynchronously. To evaluate how these asynchronies affect the psychological costs of lying, we develop an experiment in which lying decisions occur presently, while externalities (external costs) and observability (internal costs) occur in future temporal brackets. To assess if lying costs or social preferences drive our findings, we compare against a baseline in which lying opportunities become simple distributive choices. We report significant behavioral differences when outcomes occur as products of lying rather than distributive choices which suggests that lying, per se, begets distinct psychological costs. Further, the results from exponential and quasi-hyperbolic discounting estimations suggest that temporally distancing antisocial decision-making from its consequences dilutes the associated psychological costs. External psychological costs caused by lying are discounted less and are subject to milder present-bias compared to those produced by distributive choices while manipulating internal psychological costs via observability attenuates discounting and present-bias in both cases.