Abstract
Contrary to the self-interestedness assumption, numerous economic studies have documented that people are intrinsically honest. However, little is known about this trait's developmental origin. This study examines whether and the extent to which children in early childhood incur the intrinsic lying cost. We modified the commonly used coin-flip task into a child-friendly ball-drawing task with 10 trials and conducted the experiment with 225 child participants aged three to eight years old. We found that-although young children, on average, told two lies in the task (an average winning rate of 71%)-they lied significantly less than the maximum level (i.e., lying 100% of the time). The pattern was largely similar across gender and the age range studied. Furthermore, our child subjects' propensity to lie dropped by approximately 9% when they were randomly assigned to the treatment condition with an increased "perceived" intrinsic cost of lying. Overall, our results align with the innate morality hypothesis: young children, as young as three years old, are willing to give up pecuniary rewards in order to remain honest.