The Choice of Honesty: An Experiment Regarding Heterogeneous Responses to Situational Social Norms

We conduct a laboratory experiment in which we expose participants to situational social norms of approval or disapproval of lying. While participants on average conform to the situational pressure, the results highlight important differences in individual reactions. Situational norms crowd out intrinsic preferences for truthfulness; conversely, these preferences support resistance against "bad" norms. The extent and direction of the interaction of individual characteristics with situational norms and with economic incentives shed light on why people act truthfully. Out of several possible explanations, self-signaling under situational pressure provides the most convincing account of the evidence from the experiment.