I have given many examples above where it is beneficial for lies and deceit to take place and we will have further illustration of this in some of Part III of the present work. Of course, it is not generally deemed acceptable to lie and cheat; indeed even the person doing it may have some form of pathology which is a deviation from rational choice and thus it fails to make them happy. A good barometer of popular opinion is the text of pop songs, and it is very hard to find many of these that actually celebrate lying as a pleasurable pastime. Indeed only a small UK hit by wealthy Swiss dilettantes 'Yello' called 'Of Course I'm Lying' (highest position no. 23 in the 1989 singles charts) springs to mind as such an item that might have received regular radio plays. On an anthropological level, one might see rituals like the tradition of the 'April Fool', and television 'hoax' programmes are a way of expunging any latent desires for such deviance from the 'normal' person who may feel hemmed in by daily code observance. In more 'normal range' cases (to use the language of psychiatric textbooks), even the expense-fiddling worker and the overcharging bar staff may feel a utility loss from dishonesty which is in some cases forced upon them by the culture of their environment. This could be analysed in terms of the simple tradeoffs in models discussed in Chapters 1 and 2. That is, lying and cheating require a compensation in the price or factor payment to make the person tempted willing to participate in deceit. Thus we have the paradox that the 'more honest' the police officer, in example (d) above, the larger is the size of bribe they would be observed to take all other things being equal. Further, so long as there are costs of being caught then the bribe will need to be even larger the more risk-averse the potential bribe-taker is (assuming that a conventional SEU model is applied).

What is our motivation to lie then? In economic terms a lie, or deception, is analogous to the purchase of an asset which may increase utility ex post, even if detected, provided that the discounted punishment costs are sufficiently low. As implied in the discussion above of the potential bribe-taker, the rational choice model does not rule out the appearance of a taste for honesty, as a virtue, as an argument in the individual's utility function. Whether it gets there by sheer force of collectively induced habit formation or also has a strong instinctive component distinguishes 'optimistic' from 'pessimistic' rational choice thinkers. Adam Smith, Peter Kropotkin and in modern times Robert Frank (1988) and 'neo-classical Marxists' Bowles & Gintis (1999) fall into the optimistic camp as they discern instinctual yearnings for virtue which are capable of being developed further by a wisely ordained society.

The pessimistic view that all honesty is, for the most part, a contextual contingency has appeared in cynical and nihilistic philosophical writings such as those of Juvenal and Nietzsche. Thomas Hobbes's Leviathan, first published in 1641, represents possibly the first formalized system of thought that bears on this. It finds eloquent expression from the mouths of the figureheads of two of the most influential centres of modern economics: Milton Friedman (Chicago) (e.g. 1984) and Gordon Tullock (Virginia School of Public Choice). Optimism or pessimism is a garnish served up as part of the ritual use of the rational choice model [cp. Arrow (1986)]. This undertow of optimism or pessimism seems to derive from a fundamental view of human nature rather than from pure reason or empirical evidence. The pessimistic view that it is a basic instinct to lie and cheat if it maximizes utility arises from the fact that this sin is not an emotion like greed, lust, envy, jealousy or a state of quiescence like sloth; rather it is an instrument for becoming better off.

If the pessimistic or optimistic views are to be further supported from beyond the pure models of the logic of choice then the place to look seems to be in sociobiological models. Biologists who study social behaviour see lying and cheating as 'natural' behaviour which manifests from birth. In The Selfish Gene (1976), Richard Dawkins outlines the structure of opportunism which predisposes children to lies and deceit (pp. 148-50). This has its origins in the power asymmetry whereby the child is dependent on the adult who is superior in all ways relevant to the imposition of their willpower. However, the parent is genetically programmed to support the child and therefore needs to know how hungry the child is in order to optimally feed it. Reward signals are issued upon the receipt of the food, such as smiling in human species and purring in felines. The offspring can engage in deception as it may choose to make hunger signals and gratification signals that are out of proportion to its true needs. This tendency will be exaggerated by the presence of rival siblings. Dawkins is at pains to claim that children do not consciously seek to cheat their parents, but that is a mere trifle on the way to his conclusion that 'we may expect to see cheating and selfishness within families. The phrase "the child should cheat" means that genes which tend to make children cheat have an advantage in the gene pool. If there is a human moral to be drawn it is that we must teach our children altruism, for we cannot expect it to be part of their biological nature' (p. 150).

Pessimistic views of honesty are also supported by most modern psychologists as can be seen in the work publicizing the survey on lying carried out by That's Life magazine in the UK in 2001. This reported, contra Frank, that lying can be hidden and that some people are much better at it than others. People also reported a very strong willingness to lie: one much noted finding was that a quarter of women said they would lie to their partner in order to get pregnant if this proved necessary. The survival instinct may be further demonstrated in the skill with which one uses the lightening of language to 'programe' the beliefs of oneself and others. Specifically this will be manifested in one's ability to manage the cognitive dissonance ensuant on living in a community which upholds a code of honesty but yet, at the same time, offers returns to dexterous dishonesty. In the limit, these kinds of survival skills could lead to the surprising paradox of the disappearance of hypocrisy as implied in a paper by the philosopher Daniel Statman (1997). He begins from the observation that hypocrites are conventionally seen as morally corrupt, cynical egoists who consciously and deliberately deceive others in order to promote their own interests. From a survival point of view he claims that the initial experience of hypocrisy ultimately leads to self-deception and, therefore, 'real' hypocrites are hard to find. Hypocrisy transmutes into self-deception as consistent and conscious deception of others is self-defeating from the point of view of egotistical hypocrites. The best way for them to achieve their ends would be to believe in the deception, thereby not only deceiving others but also themselves. Thus it seems it might not be impossible to be a hypocrite but a 'true' hypocrite will be hard to find and, under a competitive process, we would tend to the situation where everyone is a hypocrite but nobody knows it. This is another example of adaptive preferences.

Whether a person can be a convincing hypocrite and liar requires more attention to the function of the brain than is given in Frank's account of observable displays of emotion (see below). The brain has to process emotions before they can be experienced. If certain drugs were applied or connections otherwise interfered with in the individual's receptors then the 'relevant' emotion for the action taken would not be experienced. Creating such a schism is what lies behind a lot of military training (and drug administration) which attempts to reduce the amount of overt grief felt at killing people. Lying skills would also be part of this if there were a risk of the person disclosing important information to enemies. A substantial part of concealing physical signs of lying involves the operation of memory which involves several different brain areas for different types of memory [see Carter (1998, ch. 7)]. If one sticks to an evolutionary model then those whose brains are well suited to lying may have a strategic advantage in certain situations where those who are disadvan-taged in this area behave truthfully as unsuccessful attempts to deceive are inefficient.

Data may be in constant doubt but nonetheless still drive much of modern economics especially in policy areas, so it behoves us to review the 'hard' evidence on the motivation to lie and cheat. It is difficult to isolate the motivation of economic agents from the environments they find themselves in and there is the further problem of the difficulty of obtaining suitable data. By its nature deception will tend to be hidden and therefore statistical records are invariably misrepresentative of its extent. Work on the 'hidden' or 'underground' economy uses such things as gaps in the national income accounts and unexpectedly high volumes of large-denomination notes in circulation. Such studies claim to find substantial amounts of officially unreported economic activity. A major world-wide comparison of the share of the shadow economy in GDP was performed by Schneider & Enstel (2000). The lowest shares are in the more prosperous developed economies: even here the share is about 8-10 per cent. At the top end of the range for OECD countries we find Greece, Italy and Spain in the range of 24-30 per cent, which is similar to the estimate for Eastern European countries. Latin American economies generally have a share in the 40-60 per cent range, whilst by far the greatest extent of shadow economy activity is found in some African economies where the top-end estimate is 76 per cent.

As we are more concerned with motivation than the size of the loss it seems appropriate to consider the evidence in studies of tax evasion [see Elffers (1999)]. Work in this area began with the rational choice model in its SEU variant, but many other decision-making models have been applied. The biggest departure from the mainstream is in studies which look at underlying personal differences in the tendency to observe the norm of (near) full tax observance irrespective of the levels of punishment and returns to evasion. These suggest that the factors mentioned in Chapter 5 are relevant to tax cheating: that is people observe the rules as a function of how reasonable they think the system is in terms of fairness, the use made of the tax revenues and the behaviour of those in the reference group to which the individual belongs. All of these will go to make up the level of the internally imposed feeling of guilt costs that an individual experiences if tempted into evasion. Elffers (1999, p. 559) points out that this may lead to evasion being deemed acceptable, even desirable, in some contexts and downright sinful in others.

For economic theorists seeking 'clean' tests of their models there has been an increasing resort to experimental research where subjects are paid to play (usually computer-based) games under rules controlled by the researcher, thus approximating the laboratory conditions of natural sciences. A notable area of such work has been on the question of contributions to the provision of public goods. In an experimental game setting this corresponds to a simple model of voluntary taxation. The chief research question here is: how serious is the free-rider problem? I would not [as Molho (1997) does] classify the free-rider problem, per se, as lying or cheating. If I decided not to give to the Public Broadcasting System (PBS) in the USA at all but still watched its broadcasts there may be little deception involved as I might be perfectly willing to admit to the free-riding that is going on. Deception arises in such situations where there is a deliberate strategy of over-reporting the amount one would be willing to contribute. This will have no effect if the provider does not trust the revealed intentions enough to proceed with a level of output corresponding to the expressed sum of marginal benefit curves. However, the presence of multiple periods of contracting means that the individual dissembler could offer higher levels of support early on in order to promote output, but then strategically withdraw contributions in the expectation of the gap being filled by enough expansion from other people to increase their own utility.

Experiments on voluntary provision of public goods are surveyed in Carter & Irons (1991), Ledyard (1995) and Holt & Laury (1998). These games tend to show high levels of voluntary contribution in early rounds but by the end most people are free-riding, possibly due to a contagious cascade of retaliation against the early movers in free-riding. Studies also tend to find that people who have studied economics act in a more self-interested way than others. The focus of such research is on co-operation and unfortunately for us it does not (as is also the case for ultimatum games and dictator games) build in a full-scale allowance for dishonest signalling. This is dealt with to a much greater extent in experimental research on moral hazard, which has been provided in a number of studies by DeJong et al., starting with a paper in the Journal of Accounting Research in 1985. The analysis of the properties of the outcome was based on the assumption that all players are risk-neutral. The experiment consisted of several players in the role of principal and agent, interacting over a sequence of periods. This multiperiod feature allows players to build reputations over their conduct which may influence the conduct of others. The players were fixed throughout the market experiments and kept to the same rules. Treatment of the experiments differed by allowing some trials to permit principals who had experienced adverse outcomes to pay a fee in order to discover the true quality level of service provided by agents. This was extended in some experiments by allowing the principal to collect liability payments from the agent. Each market experiment ran for two and a half to three hours. Subjects were paid for participation. When liability and fees for revelation of true quality were not in place the agents displayed substantial moral hazard in delivering the lowest quality in order to maximize profits by deceiving the principal who is unable to foretell the quality received. This would seem to reveal an underlying motivation to lie and cheat whenever possible, as Hobbesian analysis and economics of crime models would seem to imply. Consistent with such models the introduction of punishments for deception decreases its incidence. Reputation has some effect on reducing deception but for it to be a fully effective curb on dishonesty, the punitive sanctions also need to be in operation. In an ideal world, of Smithian optimism, where people told the truth, total output would be higher and hence welfare greater, other things being equal. But one of the things we are assuming to be equal is the amount of motivation an individual displays in real markets (as opposed to university laboratories) which might well vary due to greed, envy and so forth influencing people's effort levels, particularly when they have scope for gain through opportunistic indulgences in deceit. This takes us neatly to the next section.

Pregnancy And Childbirth

Pregnancy And Childbirth

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