MICRO THEORY: Professor Wooyoung Lim (HKUST)

THE ANATOMY OF HONESTY: LYING AVERSION AND DECEPTION AVERSION

This paper experimentally dissects preferences for honesty into two components: lying aversion and deception aversion. To achieve separate identification, we examine two reputation-building environments with a two-dimensional belief domain, where lying without deception occurs in one environment and deception without lying in the other. The choice data, combined with belief data collected in the lab, allows us to differentiate between individuals’ aversion to making literally untrue statements (lying aversion) and their aversion to statements intended to manipulate others’ beliefs (deception aversion), while excluding other plausible explanations such as erroneous inferences and misunderstanding.