Dishonesty as a collective-risk social dilemma

Abstract

We investigated lying as a collective-risk social dilemma. Misreporting resulted in increased individual earnings but when total claims reached a certain threshold, all group members were at risk of collective sanction, regardless of their individual behavior. Due to selfishness and miscoordination, most individuals earned less than the reservation payoff from honest reporting in the group. However, preferences for truth-telling lowered the risk of collective sanction in this setting compared to a social dilemma game in which players could make direct claims without lying. The risk of sanctions decreased with risk aversion and a smaller group size.