Studying economics increases the tendency to lie

March 9, 2013

working paper by Raúl López-Pérez and Eli Spiegelman, from universities in Montreal and Madrid, suggests that studying economics at the university might increase a student’s inclination to lie. The abstract for the paper reads as follows:

“Recent experimental evidence suggests that some people dislike telling lies, and tell the truth even at a cost. We use experiments as well to study the socio-demographic covariates of such lie aversion, and find gender and religiosity to be without predictive value. However, subjects’ major is predictive: Business and Economics (B&E) subjects lie significantly more frequently than other majors. This is true even after controlling for subjects’ beliefs about the overall rate of deception, which predict behavior very well: Although B&E subjects expect most others to lie in our decision problem, the effect of major remains. An instrumental variables analysis suggests that the effect is not simply one of selection: It seems that studying B&E has a causal impact on behavior.”

One of the studies aimed to determine the direction of causation. Is instruction in B&E causing otherwise normal students to become more deceitful or are naturally dishonest individuals simply more drawn towards B&E? 

To answer this question, López-Pérez and Spiegelman designed an experiment that involved two participants, a “sender” and a “receiver”. The sender would observe a computer monitor that randomly display either a green or blue circle and report to the receiver that either the blue or the green circle has appeared on his screen. The sender is rewarded with 15€ if he reports a green, with 14€ if he reports a blue circle – irrespective of whether he is lying or not. The receiver on the other hand receives 10€ irrespective of the true color and the sender’s honesty (and is not even informed whether the sender’s report was honest or not).

By fully disclosing the experimental setup to the participants, López-Pérez and Spiegelman are able to rule out both altruism and guilt-aversion influences as it is made very clear that the receiver will always be awarded 10€, regardless of the sender’s report and examine solely the sender’s dilemma between honesty and material interest. 

In this way, every other reason for the sender to report the true color, other than a desire to be honest, is ruled out. A homo economicus-like sender would always report a green circle in order to maximize his profit. Only individuals with some sort of natural aversion to dishonesty would not. And sure enough the results, based on a sample of 257 students, indicates a clear connection between studying B&E and the inclination to give dishonest reports. 

Tags: , ,

Leave a Reply

Your email address will not be published. Required fields are marked *


Democracy Now