Pants on fire: When consumers lie to service providers

Is honesty the best policy? According to a new study in the Journal of Consumer Research, consumers who lie during a service encounter are more satisfied than truth tellers when they get what they want.

"Although we might expect that a positive outcome would be 'tainted' for liars as they would feel guilty about their actions, liars are significantly more satisfied than truth tellers," write authors Christina I. Anthony and Elizabeth Cowley (both The University of Sydney).

The authors conducted a series of lab experiments where participants either told the truth or lied during conversations with service providers in order to pursue a material reward. For example, in one experiment, participants responded to a number of questions that resulted in their ineligibility for a prize. The participants knew that they were ineligible, but had a chance to lie to the study administrator in order to acquire the prize. The results showed that liars reported more extreme evaluations of the outcomes than truth tellers. "Liars were more satisfied than truth tellers following a favorable outcome, and more dissatisfied than truth tellers following an unfavorable outcome," the authors explain. The authors found similar results when participants negotiated with a service provider and a positive outcome was only achievable by lying, and when they requested a refund for a product that fell outside the terms of the refund policy.

Why do liars have such extreme reactions? The authors say it's because lying is hard work. "Because liars are busy lying, they have fewer mental resources available for other tasks. One such important task involves using feedback from the listener to update one's expectations about how the conversation is progressing," the authors write. "Consequently, liars are more surprised by the final outcome than truth tellers, which, in turn, results in a stronger reaction to it."

The authors tested this process by inducing participants with positive or negative expectations about the outcome and provided feedback during the conversation that was inconsistent with their expectations. "Whereas truth tellers were able to correct their initial expectations based on the incoming feedback, liars were not able to update their expectations, and were therefore less prepared for the outcome," the authors write.

Christina I. Anthony and Elizabeth Cowley. "The Labor of Lies: How Lying for Material Rewards Polarizes Consumers' Outcome Satisfaction." Journal of Consumer Research: October 2012.