We experimentally investigate whether lying is more likely when the addressees are individuals or groups of individuals, and in the latter case how the probability of lying depends on the group size and the magnitude of the negative externality inflicted by the lie. We employ an observed cheating game, where an individual can reveal or misreport a privately observed number. A misreport can be monetarily beneficial for the liar but imposes a monetary loss on addressees. The privately observed number is also known to the experimenter, who, therefore, can study both whether there is truth or misreporting and, in the latter case, the extent of misreporting. Treatments vary the loss for group members compared to the loss for an individual addressee. We find that groups are never lied to more than individual addressees. When considering how much to deviate from the truth, liars are sensitive to a decreasing loss at the individual level but do not care for an increasing loss at the group level. Groups of different sizes are treated similarly. Social image concerns may explain the results.
