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Usefulness of a Non-Lying Strategy: Two Examples

by Index Investing News
March 13, 2023
in Economy
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There is a rational, self-interested reason to choose a strategy, and establish a reputation, of non-lying. This idea been recently illustrated by the condemnation of Alex Murdaugh for the murder of his wife and son, and by Sergei Lavrov, the foreign minister of the Russian government during a conference in India.

The theory is that if one follows a strategy of non-lying and succeeds establishing his reputation for telling the truth, he is more likely to be believed in the future. And to be believed and trusted is useful in any social relation.

I have no special insight about the trial and condemnation of Alex Murdaugh, scion of a family of prosecutors and himself a former part-time prosecutor in South Carolina. And I have no reason to question the jury’s verdict. My point is that the jury had reasons to doubt Murdaugh’s testimony in his own defense if only because he repeatedly admitted that he had lied in several other occasions (see “Alex Murdaugh’s Trial Lasted Six Weeks. Two Days Mattered Most,” Wall Street Journal, March 3, 2022):

The jurors heard Mr. Murdaugh, turned toward them and in tears, say that he had lied to dozens of people, hundreds of times, but he would not lie to them about the brutal killing of Maggie and Paul, who were both fatally shot at close range.

He told jurors that he lied to law enforcement about his whereabouts the night of the shooting. …

One by one, [the local prosecutor] ticked off a series of dozens of names, asking Mr. Murdaugh if he had lied to that person’s face. With rare exception, Mr. Murdaugh said he had. He admitted to stealing money from friends and clients, including his close friend Barrett Boulware, who was nearly destitute and on his deathbed at the time, and Hakeem Pinckney, a deaf teenager who had been rendered a quadriplegic in a car crash.

As for Mr. Lavrov, as he was answering questions at a conference in Delhi after a G20 meeting, he mentioned that the war in Ukraine had been “launched against us.” The audience reacted with a short burst of laughter, which, for an instant, destabilized even a habitual liar like Lavrov. He is more used to be called “Excellency.” It is worth watching a video of the event—for example the one on the website of the BBC, or one of the many others available on YouTube. The Guardian reports (“Russian Minister’s Claim Ukraine War ‘Launched Against Us’ Met With Laughter,” March 4, 2023):

“The war, which we are trying to stop, which was launched against us using Ukrainian people, of course, influenced the policy of Russia, including energy policy,” he said, briefly stumbling over his words as people in the audience laughed.

If you become known as a liar, nobody will believe you. Lavrov, however, is hired by a state that requires that he lie. The penalty for not lying might be death or at least much discomfort, so his incentives are to try to square the circle: lie each time he is asked to, and try to maintain some credibility outside his den of liars.

Which brings me to my second general point: as game theory and ordinary economic reasoning suggest, the individual’s optimal strategy changes if a critical number of liars is reached in a society. At the limit, there is no reason to tell the truth because nobody will believe you anyway. This result has a bearing on the conditions, including possibly the moral conditions, for the maintenance of a free society. Both Friedrich Hayek and James Buchanan emphasized, from different viewpoints, the moral dimension.



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