If you want an honest reaction, you should put your counterpart under time pressure. Those, who have to react spontaneously, are more likely to speak the truth. Tim Lohse, Sven A. Simon and Kai A. Konrad conducted an experimental study and found that time is crucial for deceptive behaviour. Dishonest activities not only involve coping with the trade-off between the associated costs and benefits. It also takes time to become aware of the cheating opportunity. And the latest is the decisive factor: Whereas reflection time increases the chance to become aware of the misreporting opportunity and thus increases deceptive behaviour, the study finds that any time beyond the awareness moment has no effect on the conscious decision of whether to cheat or not.
Misreporting opportunities are common in everyday life. Some of them, like the declaration of taxable income, allow for a reflective decision. Others, like the spontaneous decision to accept or return an excessive change, come as a surprise and require an intuitive response. In order to study the impact of time constraints on misreporting behaviour compared to a decision made with sufficient reflection time, Sven A. Simon and Kai A. Konrad from the Max-Planck-Institute for Tax Law and Public Finance and Tim Lohse from the Berlin School of Economics and Law, set up a laboratory experiment. First, participants took part on a computer-simulated wheel of fortune, with an 80 percent chance of drawing a low income (4 EUR) and a 20 percent chance of drawing a high income (10 EUR). Then, they were asked to report their income by clicking either on a button with the low or with the high income. Hence, participants had the chance to determine their payoff on their own by potentially giving a dishonest report. Importantly, the so called “time pressure group” was caught by complete surprise in this reporting situation and had only eight seconds to make the report. In contrast, the “contemplation group” had sufficient time to think about their actual report. This procedure made sure that some participants became aware of the misreporting opportunity and others not, and yet others could take even more time to think about the implications of a potentially dishonest report.
The good news is: Honesty seems to be the spontaneous, intuitive response. Time pressure decreased the share of dishonest reports by more than one third. This finding is driven by the cognition process to identify the misreporting opportunity which takes considerable time. The majority of subjects were not intuitively aware of the possibility to deceive. Therefore, the limitation of eight seconds to report the income reduced the awareness of the misreporting opportunity by nearly 40 percent. In turn, the vast majority of participants under time pressure who were not aware of the misreporting opportunity reported truthfully.
The bad news is: Reflective thinking does not change people’s propensity to deceive. The researchers decomposed the process of misreporting into the cognition of the misreporting opportunity and the conscious reporting decision of those subjects who are aware of the cheating possibility. They found that once subjects gained awareness of the misreporting opportunity, it made no difference whether they had less or more time to reflect. In the “contemplation group,” 47 percent of the aware subjects decided to report dishonestly, while 49 percent did so for the “time pressure group.” The nearly identical amount of misreporting in both treatments indicates that reflection time has no effect on the conscious decision to misreport beyond its effect on awareness.
Finally, the researchers allowed subjects in the time pressure group to revise their initial report. Almost all subjects who deceived under time pressure also deceived in their final report 60 seconds later (95 percent). In contrast, a considerable share of 36 percent of honest subjects under time pressure revised their report and deceived when given a second chance to report their income within the longer time interval. This behaviour is most pronounced for subjects that became aware only after the first report, and thereby highlights the importance of the cognition process of the misreporting opportunity for dishonest reporting.
Published: Journal of Economic Behavior & Organization, 2018, 146, 31-42.