IDEAS home Printed from https://ideas.repec.org/p/csr/wpaper/1008.html
   My bibliography  Save this paper

Lying and Friendship

Author

Listed:
  • Sugato Chakravarty

    (Purdue University)

  • Yongjin Ma

    (Purdue University)

  • Sandra Maximiano

    (Purdue University)

Abstract

The goal of this paper is to investigate the interaction between social ties and deceptive behavior within an experimental setting. To do so, we implement a modified sender-receiver game in which a sender obtains a private signal regarding the value of a state variable and sends a message related to the value of this state variable to the receiver. The sender is allowed to be truthful or to lie about what he has seen. The innovation in our experimental design lies in the fact that, in contrast to the extant sender-receiver games, the receiver can take no action – which eliminates strategic deception. A further innovation lies in the fact that subjects (i.e., senders) are not restricted to choose between truth telling and a unique type of lie but, instead, are allowed to choose from a distinct set of allocations that embodies a multi-dimensional set of potential lies. Our experimental design is, therefore, able to overcome an existing identification problem by allowing us to disentangle lying aversion from social preferences. We implement two treatments: one in which players are anonymous to each other (strangers); and one in which players know each other from outside the experimental laboratory (friends). We find that individuals are less likely to lie to friends than to strangers; that they have different degrees of lying aversion and that they lie according to their social preferences. Pro-social individuals appear to be more lying averse. If they lie, however, they are equally likely to do so with friends and strangers. The deceptive behavior of selfish individuals mimics those of pro social types only when subjects play with friends. Overall, in addition to social preferences, friendship appears to be an important factor in improving our understanding of deceptive behavior.

Suggested Citation

  • Sugato Chakravarty & Yongjin Ma & Sandra Maximiano, 2011. "Lying and Friendship," Working Papers 1008, Purdue University, Department of Consumer Sciences, revised Mar 2011.
    • Handle: RePEc:csr:wpaper:1008
    as

    Download full text from publisher

    File URL: ftp://128.210.123.107/csr/wpaper/LyingMarch2011.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000. "Investor protection and corporate governance," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 3-27.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. M. Vittoria Levati & Aaron Nicholas & Birendra Rai, 2011. "Testing the Analytical Framework of Other-Regarding Preferences," Monash Economics Working Papers 26-11, Monash University, Department of Economics.
    2. Wang, Ruixin, 2015. "Essays on development economics and public economics," Other publications TiSEM e1779514-5b71-4726-925b-2, Tilburg University, School of Economics and Management.
    3. Christoph Feldhaus & Johannes Mans, 2014. "Who do you lie to? Social identity and the cost of lying," Working Paper Series in Economics 76, University of Cologne, Department of Economics.
    4. Cappelen, Alexander W. & Sørensen, Erik Ø. & Tungodden, Bertil, 2013. "When do we lie?," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 258-265.
    5. Grosch, Kerstin & Rau, Holger A., 2017. "Gender differences in honesty: The role of social value orientation," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 258-267.
    6. Xiao, Erte, 2017. "Justification and conformity," Journal of Economic Behavior & Organization, Elsevier, vol. 136(C), pages 15-28.
    7. Levati, M. Vittoria & Nicholas, Aaron & Rai, Birendra, 2014. "Testing the single-peakedness of other-regarding preferences," European Economic Review, Elsevier, vol. 67(C), pages 197-209.
    8. Björn Frank, 2014. "Laboratory Evidence on Face-to-Face," International Regional Science Review, , vol. 37(4), pages 411-435, October.
    9. Wang, Ruixin, 2016. "Who Should I Share Risk with? Gifts can tell : Theory and Evidence from Rural China," Discussion Paper 2016-003, Tilburg University, Center for Economic Research.
    10. Wang, Ruixin, 2016. "Who Should I Share Risk with? Gifts can tell : Theory and Evidence from Rural China," Other publications TiSEM 95c6dbed-3f49-4d5a-987e-2, Tilburg University, School of Economics and Management.
    11. M. Vittoria Levati & Aaron Nicholas & Birendra Rai, 2011. "Testing the Framework of Other-Regarding Preferences," Jena Economics Research Papers 2011-041, Friedrich-Schiller-University Jena.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benkraiem, Ramzi & Boubaker, Sabri & Brinette, Souad & Khemiri, Sabrina, 2021. "Board feminization and innovation through corporate venture capital investments: The moderating effects of independence and management skills," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    2. Oxelheim, Lars & Rafferty, Michael, 2005. "On the static efficiency of secondary bond markets," Journal of Multinational Financial Management, Elsevier, vol. 15(2), pages 117-135, April.
    3. Ilhan-Nas, Tulay & Okan, Tarhan & Tatoglu, Ekrem & Demirbag, Mehmet & Wood, Geoffrey & Glaister, Keith W., 2018. "Board composition, family ownership, institutional distance and the foreign equity ownership strategies of Turkish MNEs," Journal of World Business, Elsevier, vol. 53(6), pages 862-879.
    4. Núria Rodríguez‐Planas, 2018. "Mortgage finance and culture," Journal of Regional Science, Wiley Blackwell, vol. 58(4), pages 786-821, September.
    5. Da Teng & Douglas B. Fuller & Chengchun Li, 2018. "Institutional change and corporate governance diversity in China’s SOEs," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(3), pages 273-293, May.
    6. Knack, Steve & Xu, Lixin Colin, 2017. "Unbundling institutions for external finance: Worldwide firm-level evidence," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 215-232.
    7. Kim, Sang-Joon & Bae, John & Oh, Hannah, 2019. "Financing strategically: The moderation effect of marketing activities on the bifurcated relationship between debt level and firm valuation of small and medium enterprises," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 663-681.
    8. Rafael La Porta & Florencio Lopez-de-Silane & Cristian Pop-Eleches & Andrei Shleifer, 2002. "The Guarantees of Freedom," NBER Working Papers 8759, National Bureau of Economic Research, Inc.
    9. Bhatta, Bibek & Marshall, Andrew P. & Neupane-Joshi, Suman & Thapa, Chandra, 2021. "Foreign Ownership and the Enforcement of Corporate Governance Reforms," QBS Working Paper Series 2021/02, Queen's University Belfast, Queen's Business School.
    10. Quigley, Neil & Evans, Lewis, 2002. "An Analysis of the Reserve Bank of New Zealand's Policy on the Incorporation of Foreign Banks," Working Paper Series 3897, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    11. Z. Jun Lin & Shengqiang Liu & Fangcheng Sun, 2017. "The Impact of Financing Constraints and Agency Costs on Corporate R&D Investment: Evidence from China," International Review of Finance, International Review of Finance Ltd., vol. 17(1), pages 3-42, March.
    12. Ruth V. Aguilera & Kurt A. Desender & Mónica López-Puertas Lamy & Jun Ho Lee, 2017. "The governance impact of a changing investor landscape," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(2), pages 195-221, February.
    13. Chong-En Bai & Zhigang Tao & Changqi Wu, 2004. "Revenue Sharing and Control Rights in Team Production: Theories and Evidence from Joint Ventures," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 277-305, Summer.
    14. Ding, Mingfa, 2014. "Political Connections and Stock Liquidity: Political Network, Hierarchy and Intervention," Knut Wicksell Working Paper Series 2014/7, Lund University, Knut Wicksell Centre for Financial Studies.
    15. Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Explanations, Types and Implications," CAMA Working Papers 2013-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    16. I.Igal Magendzo, 2002. "Are Devaluations Really Contractionary?," Working Papers Central Bank of Chile 182, Central Bank of Chile.
    17. repec:spo:wpmain:info:hdl:2441/8221 is not listed on IDEAS
    18. Randall S. Kroszner & Philip E. Strahan, 1999. "Bankers on Boards: Monitoring, Conflicts of Interest, and Lender Liability," NBER Working Papers 7319, National Bureau of Economic Research, Inc.
    19. Nenova, Tatiana, 2003. "The value of corporate voting rights and control: A cross-country analysis," Journal of Financial Economics, Elsevier, vol. 68(3), pages 325-351, June.
    20. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan & Shafique, Sujana & Lartey, Theophilus, 2020. "R&D investment, firm performance and moderating role of system and safeguard: Evidence from emerging markets," Journal of Business Research, Elsevier, vol. 106(C), pages 94-105.
    21. Chang, Yu-Shan & Chiang, Chia-Yu & Liu, Li-Lin (Sunny) & Xie, Xinmei (Lucy), 2019. "Audit partner independence and business affiliation: evidence from Taiwan," Advances in accounting, Elsevier, vol. 46(C), pages 1-1.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:csr:wpaper:1008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sugato Chakravarty (email available below). General contact details of provider: https://edirc.repec.org/data/dcpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.