Impact of Lying Aversion and Prosociality on Cheating

When individuals decide whether or not to lie, they compare the monetary benefits with the psychological cost of violating their norms. In addition, they are more likely to lie when their lies benefit others. This paper compares the impact of the aversion to lying and prosociality on cheating. I first present a model that incorporates heterogeneous lying costs and prosociality as a part of individuals' preferences. I show that individuals are mostly honest when someone else has lied on their behalf. At the same time, if lying generates a positive externality, individuals lie more due to prosocial motives. I test these predictions in two online experiments and show that participants are more dishonest when their lies benefit others. More importantly, I present evidence that, on average, the prosocial motive is stronger than the lying aversion motive. Further results show that individuals care about their influence on others' outcomes rather than taking actions that signal a prosocial intention but do not impact others' outcomes