ECN 340 Lecture Notes - Lecture 10: Morality
23 Nov 2015
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Document Summary
Lying more prevalent than cheating because of wide array of opportunities to lie. Calculations include chances of being caught and injury expected to be suffered from being caught. If you are caught lying once, you may not be believed next time-ruined reputation. Door to door salesman can easily lie because unlikely to meet the same person again; cost of lying is very low. More interaction between two people the less lying can be expected; lying is more easily detected. Benefits of lying are usually just short term. People less likely to check an honest person. Moral code reduces costs of dealing with others; never lies. There are economies to be gained from truthfulness. Lower transaction costs (the cost of exchanging with others) Huge cost to lying: we may not believe a liar even when he/she tells the truth. Voter has little motive to check up on what politician is promising.
