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Incentives and cheating

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  • Kajackaite, Agne
  • Gneezy, Uri

Abstract

We study how cheating behavior is affected by incentives. After replicating the finding in the cheating game literature that lying does not increase with incentives, we show that this insensitivity is not a characteristic of the intrinsic lying cost, but rather a result of concern about being exposed as a liar. In a modified “mind” game in which this concern is eliminated, we find that people lie more, and in particular lie more when the incentives to do so increase. Thus, our results show that for many participants, the decision to lie follows a simple cost–benefit analysis: they compare the intrinsic cost of lying with the incentives to lie; once the incentives are higher than the cost, they switch from telling the truth to lying.

Suggested Citation

  • Kajackaite, Agne & Gneezy, Uri, 2017. "Incentives and cheating," Games and Economic Behavior, Elsevier, vol. 102(C), pages 433-444.
    • Handle: RePEc:eee:gamebe:v:102:y:2017:i:c:p:433-444
    DOI: 10.1016/j.geb.2017.01.015
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    More about this item

    Keywords

    Cheating; Lying costs; Incentives; Laboratory experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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