It's not a lie if you believe the norm does not apply: Conditional norm-following and belief distortion

Abstract

We investigate self-serving belief distortion about dominant norms of honesty. Consider an environment where the subject can earn a monetary reward by lying. In contrast to the existing literature on motivated beliefs, we do not focus on distortion in one dimension alone, but instead consider beliefs in two dimensions: empirical (what other people do) and normative (what other people approve of). Our experimental findings are consistent with the predictions of a dual-self model in which conditional norm-followers strategically distort their beliefs to justify self-serving behavior. We argue that the asymmetry between what we infer from empirical as opposed to normative information is a key ingredient of belief distortion in our context: widespread honest behavior is a strong indicator of disapproval of lying (and thus that a norm of honesty is followed), but the opposite does not hold. Taken together, we show why, when, and which norm-relevant beliefs are strategically distorted.