January 12th 2021, Tim Lohse (Hochschule für Wirtschaft und Recht Berlin): Pecunia non olet - On the self-selection into (dis)honest earning opportunities
Pecunia non olet - On the self-selection into (dis)honest earning opportunities
We study self-selection into earning money in an honest or dishonest fashion based on individuals. attitudes toward truthful reporting. We propose a decision-theoretic framework where individuals willingness to pay for honest earnings is determined by their (behavioral) lying costs. Our laboratory experiment identifies lying costs as the decisive factor causing self-selection into honest earning opportunities for individuals with high costs and into cheating opportunities for those prepared to misreport. Our experimental setup allowsus to recover individual lying costs and their distribution in the population.