We compare sharing when endowments are obtained by luck, effort, or lying; endowments obtained through lying are treated as if they were “hard-earned.” this directly supports that lying involves psychological costs.

No gain without pain: The psychological costs of dishonesty. Isabel Thielmann, Benjamin E. Hilbig. Journal of Economic Psychology, https://doi.org/10.1016/j.joep.2018.06.001

Highlights
•    Evidence on the psychological costs of dishonesty is restricted to indirect tests.
•    We present a more direct test of the costs of lying using the dictator game.
•    We compare sharing when endowments are obtained by luck, effort, or lying.
•    Endowments obtained through lying are treated as if they were “hard-earned”
•    This directly supports that lying involves psychological costs.

Abstract: Psychological accounts of dishonesty propose that lying incurs subjective costs due to threating individuals’ moral self-image. However, evidence is restricted to indirect tests of such costs, thus limiting strong conclusions about corresponding theories. We present a more direct test of the costs of lying. Specifically, if lying is psychologically costly, individuals should feel entitled to gains they obtained through dishonesty – similar to those they actually earned through getting lucky or even investing effort. Correspondingly, in three experiments, we compared individuals’ willingness to share in the dictator game, with varying mechanisms generating the to-be-shared endowment: getting lucky, exerting (cognitive) effort, and lying. We consistently found that individuals were at least as unwilling to share an endowment obtained through dishonesty as an endowment obtained through individual effort or true luck. This suggests that individuals perceived gains obtained through dishonesty as “hard-earned”, thus directly supporting the theory that lying involves psychological costs.

Keywords: dishonest behavior; cheating; psychological costs; dictator game; coin-tossing task; die-rolling paradigm