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Designing Self-Reporting Regimes to Encourage Truth Telling: An Experimental Study

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Abstract

We report results from an experiment that investigates truthfulness in self-reporting under different reporting regimes. The experiment involves a production task with self-reporting of accidents, with reporting compulsory for some participants, but only voluntary for others. We find that dishonesty is prevalent, but accident reporting is more frequent with compulsory reporting compared with voluntary. This suggests that lie aversion is a stronger force than the intrinsic motivation to voluntarily report, and that careful design of self-reporting regimes is necessary by enforcement agencies to achieve satisfactory compliance outcomes. Our results are relevant for several areas beyond regulatory compliance, including dishonesty in social security claims, insurance claims, workplace expense claims, income tax returns, and financial reporting.

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  • Lana Friesen & Lata Gangadharan, 2011. "Designing Self-Reporting Regimes to Encourage Truth Telling: An Experimental Study," Discussion Papers Series 426, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:426
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    4. Jade Wong & Andreas Ortman & Alberto Motta & Le Zhang, 2013. "Understanding Social Impact Bonds and Their Alternatives: An Experimental Investigation," Discussion Papers 2013-21, School of Economics, The University of New South Wales.
    5. Gilles Grolleau & Martin G. Kocher & Angela Sutan, 2014. "Cheating and Loss Aversion: Do People Lie More to Avoid a Loss?," CESifo Working Paper Series 4965, CESifo.
    6. Rosenbaum, Stephen Mark & Billinger, Stephan & Stieglitz, Nils, 2014. "Let’s be honest: A review of experimental evidence of honesty and truth-telling," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 181-196.
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    8. Siniver, Erez & Yaniv, Gideon, 2018. "Losing a real-life lottery and dishonest behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 26-30.
    9. Hermann, Daniel & Mußhoff, Oliver, 2019. "I might be a liar, but I am not a thief: An experimental distinction between the moral costs of lying and stealing," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 135-139.
    10. Cameron, Lisa & Meng, Xin & Zhang, Dandan, 2022. "Does being “left–behind” in childhood lead to criminality in adulthood? Evidence from data on rural-urban migrants and prison inmates in China," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 675-693.
    11. Geraldes, Diogo & Heinicke, Franziska & Rosenkranz, Stephanie, 2019. "Lying in Two Dimensions and Moral Spillovers," MPRA Paper 96640, University Library of Munich, Germany.
    12. Timothy N. Cason & Lana Friesen & Lata Gangadharan, 2021. "Complying with environmental regulations: experimental evidence," Chapters, in: Ananish Chaudhuri (ed.), A Research Agenda for Experimental Economics, chapter 4, pages 69-92, Edward Elgar Publishing.
    13. Huynh, Toan L.D. & Rieger, Marc Oliver & Wang, Mei, 2022. "Cross-country comparison in dishonest behaviour: Germany and East Asian countries," Economics Letters, Elsevier, vol. 215(C).
    14. Catrine Jacobsen & Toke Reinholt Fosgaard & David Pascual†Ezama, 2018. "Why Do We Lie? A Practical Guide To The Dishonesty Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 357-387, April.
    15. Anirudh Tagat, 2019. "The Taxman Cometh: Behavioural Approaches to Improving Tax Compliance in India," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 3(1), pages 12-22, March.
    16. D.J. da Cunha Batista Geraldes & Franziska Heinicke & S. Rosenkranz, 2021. "Lying in Two Dimensions," Working Papers 2101, Utrecht School of Economics.
    17. Robert Innes, 2017. "Lie aversion and self-reporting in optimal law enforcement," Journal of Regulatory Economics, Springer, vol. 52(2), pages 107-131, October.
    18. Toke Reinholt Fosgaard, 2020. "Students Cheat More: Comparing the Dishonesty of a Student Sample and a Representative Sample in the Laboratory," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(1), pages 257-279, January.
    19. Friesen, Lana & Gangadharan, Lata, 2012. "Individual level evidence of dishonesty and the gender effect," Economics Letters, Elsevier, vol. 117(3), pages 624-626.
    20. Faravelli, Marco & Friesen, Lana & Gangadharan, Lata, 2015. "Selection, tournaments, and dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 110(C), pages 160-175.
    21. Luka Koning & Marianne Junger & Joris Hoof, 2020. "Digital signatures: a tool to prevent and predict dishonesty?," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 19(2), pages 257-285, November.
    22. Burfurd, Ingrid & Gangadharan, Lata & Nemes, Veronika, 2012. "Stars and standards: Energy efficiency in rental markets," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 153-168.
    23. Timo Goeschl & Marcel Oestreich & Alice Soldà, 2023. "Compliance And Truthfulness: Leveraging Peer Information With Competitive Audit Mechanisms," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 23/1069, Ghent University, Faculty of Economics and Business Administration.

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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