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Dishonesty in Complex Environments: Deliberate Lies, Shortcuts, or Accidental Mistakes?

Author

Listed:
  • Pascal Nieder
  • Sven Arne Simon

Abstract

Compliance with complex regulatory requirements can be challenging. We study why and how complexity affects non-compliance in terms of incorrect reporting. Our novel experimental design isolates two distinct complexity effects: an increase in honest mistakes and a substantial shift toward self-serving dishonesty. We identify two mechanisms for this dishonesty shift. First, individuals with social image concerns systematically take advantage of plausible deniability. Second, we document an unexplored form of dishonesty: besides conscious lies, individuals use fraudulent shortcuts in response to complex cheating opportunities.

Suggested Citation

  • Pascal Nieder & Sven Arne Simon, 2026. "Dishonesty in Complex Environments: Deliberate Lies, Shortcuts, or Accidental Mistakes?," CESifo Working Paper Series 12692, CESifo.
    • Handle: RePEc:ces:ceswps:_12692
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    More about this item

    Keywords

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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