Social Comparison and Dishonesty in Groups : An Experimental Test

This study examines dishonesty in two-person groups in which social comparison is possible. We conducted an online experiment using a version of the coin-toss task in two different environments where group members’ payoffs are affected (or not) by each other’s reports. We find that, in both environments, if one member expects their counterpart to be dishonest (which leads to payoff inequality in the case that the group member is honest), they choose to be dishonest. This finding suggests that, for most people, the cost of inequality (i.e., the cost of being behind) is higher than the cost of lying. We also find that the presence of a third party has no significant effect on dishonesty, regardless of the environment. Examining third-party behavior, we observe that assigned punishment points are higher in the environment where group members’ reports do not affect each other’s payoffs