Abstract:
This study aims to analyze the economic decision of lying in an attempt to evaluate the factors that causes heterogeneity in preferences for truthfulness among and within the individuals. The results are obtained from the sample of young students of Islamabad, using Cheap-talk sender receiver game. The research is narrowed down to two areas of interest, firstly, identifying people into types, including ‘Ethical’ type; those who never lie, ‘Economic’ type; those who always lie, and those who partially lie, secondly, exploring the intrinsic costs of lying. The results testify the heterogeneity of preferences for truthfulness and present the findings that people can’t be categorized into two types of those who never lie and those who always lie, rather there is third kind of those who partially lie. Study also concludes that a modest portion of population are completely truthful purely due to their aversion to action of lying. Furthermore, our model predicts that people indulge in partial lying on account of an urge to maintain a positive self-concept. However, self-concept maintenance in itself has only a modest role in explaining truthful communication. Nevertheless, role of self-concept maintenance in explaining truthfulness is more evident, if the respondents are communicated that their decision to lie will be disclosed to their partner. Even though, ‘Shame’, and ‘Religion Priming’ play significant role in curbing lying behavior, there is still portion of people who change their preferences from truthfulness to lying after being given religious reminders. Moreover, Shame and religion priming positively interact with small impact of self-concept maintenance to instigate truthfulness to a greater extent. Overall, we find strong effects of Religion priming in relation to explaining preferences for truthfulness.
