How does entitlement affect honesty?
Lying is a central topic in several life aspects. For instance, sellers can overstate the quality of a product to charge more, taxpayers can under-report their revenues in a tax declaration to pay less, and insured people can lie about a claim to get money. While individuals typically feel that lying is immoral and have preferences for truth-telling, truth-telling often comes with some costs and even relatively moral people might be willing to lie in some circumstances. For example, when selling a used car, a seller might think about all of the months they spent working extra hours to pay back the car loan. Having their effort in mind may lead the seller to misreport the car's condition when bargaining with buyers because sellers feel they deserve to retain the fruits of their labor.
Indeed, there is empirical evidence on the existence of such entitlement effects. An extensive literature in experimental economics shows how earning money creates an entitlement effect with consequences for prosocial behavior. For example, experiments typically show that individuals who earned their income through effort are less willing to share it with others than participants who did not work for their income. Less is known about the interaction of entitlement concerns and other aspects of moral behavior, such as honesty, to which economists have recently turned their attention. In a paradigmatic experimental design to study lying, participants roll a die and report their rolled number to the experimenter. Depending on the number they report, they receive different amounts of money. Participants roll their die in secret and, therefore, can lie about their reported number to receive more money. The collective evidence from numerous studies using variants of the die roll task shows that individuals are -- at least to economists -- surprisingly honest and forego around three-quarters of their potential earnings on average.
We conducted an experiment to study how entitlement concerns affect honesty. In this experiment, participants receive either a high or a low income from which they have to return a share to the experimenter. How much exactly they have to return is determined by a die roll task, where participants have the opportunity to cheat. Two experimental conditions vary how participants receive their endowment. For one group of participants, the endowment allocation is decided by their performance in a previous task, with top performers earning a high income and bottom performers earning a low income. Thus, in this condition, the initial endowment is earned, which may create an entitlement effect. For another group, the endowment allocation is determined by a random draw.
The experimental results show that entitlement influences lying in the following way: when participants' performance determines income, participants who earn less money lie less than participants who earn more money. This result is driven by the bottom performers' guilt, who lie even less than participants who receive the low endowment in the random condition. In other words, the experiment shows that there can be a disentitlement effect; the group with the lowest levels of lying had the lowest levels of deservingness. The results imply that individuals do not simply become more amoral and cheat more if they earned their income. Instead, just as individuals are often meritocratic and want to reward good performance, they also tend to be meritocratic when it comes to cheating, where bottom performers simply feel they don’t deserve to cheat as much as the top.
This study is published at Journal of Economic Behavior and Organization
 An interactive presentation of different experimental findings is available under preferencesfortruthtelling.com.