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The University of Southampton
EconomicsPart of Economic, Social and Political Science

1403 Concern For Relative Standing and Deception (S. Galanis & M. Vlassopoulos)

Authors: Spyros Galanis (University of Southampton) and Michael Vlassopoulos (University of Southampton)

Paper number 1403

We report results from a sender-receiver cheap talk game, which explores whether an individual's decision to deceive is influenced by a concern for relative standing in a reference group. We show theoretically that positively biased senders, who think they are higher in the deception distribution than they actually are, will correct their beliefs and increase their cheating, when presented with information on the actual deception distribution. Hence, a predominantly positively biased group of senders will increase its average deception. Moreover, within a group, being more positively biased implies cheating less. The experimental data confirm both of these hypotheses.

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