Study: Lying with the truth is risky

During the Sept. 26, 2016, presidential debate, Donald Trump responded to a question about a 1973 federal lawsuit charging his family’s company with housing discrimination this way: “We settled the suit with zero – no admission of guilt. It was very easy to do. But they sued many people.”

The U.S. Justice Department had charged Trump, his father and their company, Trump Management Inc., with violating the Fair Housing Act for refusing to rent to African-Americans. A New York Times story on the case reported there was no evidence that Trump personally set rental policies, but consent decrees customarily don’t include an admission of guilt. The story suggests the lack of an admission of guilt did not mean Trump was innocent.

Giving truthful statements to mislead is called paltering. You just might be hearing the term used more as a result of a new study by economists and behavioral scientists at Harvard Business School and the Wharton School of Business at the University of Pennsylvania.

The authors identified paltering as a distinct form of deception unlike lies by omission or outright lies, defined as lies by commission, in their study published in December in the Journal of Personality and Social Psychology.

“People do it all the time, especially politicians, so we wanted to understand the phenomenon better,” lead author Todd Rogers, Ph.D., associate professor of public policy at the Harvard Kennedy School, said via email.

The aforementioned example with Trump was cited by one of the study’s authors, Francesca Gino, Ph.D., a Harvard professor of business administration, in an article last October in the Harvard Business Review.

Candidates may resort to paltering to influence voters, but it is also common in business negotiations.

Rogers and his colleagues conducted six experiments involving more than 1,750 participants. They found that laypeople can distinguish between paltering, lying by omission or lying by commission.

In one experiment, participants were randomly assigned to imagine themselves as trying to sell a used car on eBay. They were told two true statements: “Twice in the last year, this car would not start and both times you had to have a mechanic fix it” and “This car drives very smoothly and is very responsive. Just last week it started up with no problems when the temperature was -5 degrees Fahrenheit.”

Participants were told that a potential buyer emails and asks, “Has this car ever had problems?” They were then randomly assigned to one of two conditions, either lie by commission or paltering. Participants could choose to send an honest or misleading message.

Both the lie by commission and paltering group had the option of replying with “Twice in the last year, this car would not start and both times I had to have a mechanic fix it.”

Or the lie by commission group could choose to reply “This car has never had problems” and the palter group could reply “This car drives very smoothly and is very responsive. Just last week it started up with no problems when the temperature was -5 degrees Fahrenheit.”

Seventy-one percent of participants in the palter group chose to mislead compared to 55 percent of those in the lie by commission group. Palterers were more than twice as likely to report that their deceptive option was of higher ethicality than those in the lie by commission group.

Negotiators who paltered believed that their behavior was more ethically acceptable than both lies by omission and lies by commission. But when a negotiating partner discovered their counterpart had paltered them in the past, they were less likely to trust that person and want to negotiate with them in the future.

Thus, engaging in paltering can be risky and, if discovered, can cause significant reputational harm, the authors said.

“The flawed mental model was surprising. Palterers think paltering is far more honest than their counterparts do. This likely increases the use of paltering, but leads to reputational and trust consequences,” Rogers said.

In legal settings, people may palter to avoid incriminating themselves and avoid committing perjury, said Joseph Toomey, Ph.D., assistant professor of clinical psychology at William James College, who was not involved with the study. Toomey has a specialization in clinical forensic psychology.

“For example, someone might answer a question about their whereabouts at the time of an offense by saying that they were at a restaurant that day. In this example, the person was in fact at a restaurant earlier in the day, but at the time of the actual offense, they were in the victim’s apartment.”

Toomey added someone might palter in a social situation to avoid embarrassment, maintain the status quo in a relationship, maintain a particular image or to avoid harming someone else.

“I’m not surprised by the researchers’ finding regarding a preference for paltering given the firm support for the notion that most people consider lying to be highly undesirable.”

The authors say more study is needed to explore the short-term and long-term returns on paltering and the likelihood of paltering and lying by commission being uncovered.

“We hope that naming it, studying it and showing that palterers mistakenly think palters are ethical will decrease the use of palters,” Rogers said.