Cheating is Unaffected by Loss Aversion or Entitlement : An Online Experiment

We investigate how loss aversion and entitlement influence lying. We conducted an online experiment with a cheating task in which participants drew and reported a number. Participants are instructed to report their draw honestly, but they may cheat by saying a different number in order to earn a higher payoff. We vary whether participants perform a real effort task before the cheating task and whether participants can cheat for an additional gain or to avoid a loss using a 2×2 design. We find no systematic effect of having a prior real effort stage on lying behavior and find that participants lie more in the gain domain than in the loss domain. Furthermore, we find a correlation between real effort task performance and lying, but only in the gain domain. This is the first study to look at how entitlement affects cheating behavior in both the gain and loss domains