This paper studies the implications of agents signaling their moral type in a lying game. In the theoretical analysis, a signaling motive emerges where agents dislike being suspected of lying and where some types of liars are more stigmatized than others. The equilibrium prediction of the model can explain experimental data from previous studies, in particular on partial lying, where some agents dishonestly report a non payoff-maximizing report. I discuss the relationship with previous theoretical models of lying that conceptualize the image concern as an aversion to being suspected of lying. The second half of the paper tests the theoretical predictions in an experiment. In contrast to previous literature, the experimental results show no evidence that image concerns influence lying behavior in the laboratory.
Experimental participants in a cheating game draw a random number and then report any number they wish, receiving a monetary payoff based only on the report. We study how these reports depend on the level of observability of both the random draw and the report by the experimenter. Our results show that whereas increasing the observability of the random draw decreases cheating, increasing the anonymity of the reports does not affect average reports.
We study the effect of entitlement on the willingness to lie. We set up a model of lying where individuals feel more or less entitled to their endowment depending on how they earned it. When given the opportunity to lie to keep their endowment, individuals who feel more entitled are encouraged to lie while others are discouraged. To test the model predictions we use a laboratory experiment where we compare the lying behavior of participants endowed with a high endowment and participants endowed with a low endowment. In one treatment, the allocation of the endowment is decided by participants' performance, and in the other, it is determined by a random draw. Our study shows that deservingness influences lying in an intuitive direction: when participants' performance determines income, those who earn less money lie less than those who earn more. We do not find differences in lying when participants perform the same task but lie to keep windfall endowments.