Group lying with negative externality

Abstract

Abstract We use a modified die‐rolling experiment to study whether negative externality affects a group's decisions about whether to cheat. Our results show that group members are less likely to lie when faced with a passive out‐group player only if two members of the group share an unequal payment for lying. The less‐paid party in the group plays a dominant role in the honest decision by proposing the true number more frequently in arguments for group coordination.

Keywords

• communication
• externality
• group decisions
• laboratory experiment
• lying