I introduce an experimental design that allows me to directly observe whether a subject is lying or telling the truth for a proportion of decisions in a classic lying experiment. I vary the objective probability of observation and compare the differing equilibrium predictions of models, which could not be tested with previous experimental methods.
It is a well-known theoretical result that paying one random decision is not an incentive compatible payment procedure in ambiguity experiments. Recent work by Baillon, Halevy, and Li (2022 - Econometrica) has shown that using this payment procedure may distort decisions by up to 50%! They lay out the dilemma well. You can give a single decision problem and pay subjects for that single decision, which is incentive compatible but restricts the types of questions you can ask, or you can ask multiple questions but risk miscoding people as subjective expected utility maximizers when they actually have ambiguity averse preferences. In this project, I identify and apply a payment procedure that allows me to ask subjects multiple questions while removing the problematic hedging opportunity that exists when paying one random decision. The Random Stopping Procedure (RSP) eliminates the hedging opportunity in ambiguity experiments for all preferences that satisfy consequentialism.
In a US population, we study lying behavior in an uncertain environment where karmic motivations may be relevant. We hypothesize that karmic motivations may not be as prominent in our population, so we implement a treatment where subjects are given a religious prime before participating in the task. If this prime makes religious identity more salient, then behavior should shift to being consistent with karmic motivations (which are common even in western religions). We additionally introduce a money prime and a competitive prime to test if these shift behavior to more lying without following the pattern consistent with a karmic motivation.
I test the concept of "Detectable vs Deniable Lies" (Tergiman & Villeval, 2023 - Management Science) in an individual decision setting. For this setting, I analyze equilibrium behavior of a model that considers a fixed lying cost and social image concerns. I vary the probability of observation and the value of the deniable lie; I then compare my results to the comparative statics of the model.