When people ask why people lie, they seldom realize the complexity of the question. My 14 year old nephew asked me why people lie the other day, and although I have almost thirty years experience in forensic psychology, it took all of my resources to answer this question.
The truth is, as I told my nephew, that there is no simple reason why people lie, and there isn't even a simple way to say what a lie is. Is an omission a lie? Maybe, maybe not, but if it is, it certainly isn't in the same way that a frank statement against fact is a lie.
And is flattering someone, pretending that their dress looks better on them than it does for example, a lie? Before we can really answer the question of why people lie, we must be able to answer these questions, and there are no easy answers.
Some people lie because they can't help it, and these are called pathological liars. They are so obsessed with being seen as interesting, unusual, or perhaps different than they are, that they are able and willing to make up the most outrageous stories about their lives, stories that no one will believe, to try to convince themselves that things are different than they really are.
Of course, this isn't quite the same reason why people lie in general, but it is close. A simple answer to why people lie? Usually to impress others or to get out of a bad situation. Maybe they want to get away with not having done their homework, or having been late for work, or maybe they want others to think that they are more accomplished than they are so that they can have more respect from their peers. It is hard to tell in most situations why people lie, but it is easier to tell that they are lying.
One of the best cues to seeing that someone is lying is their body language. No matter why people lie, they tend to do it in certain ways that are easy to see once you learn the trick to it. They don't necessarily fidget a lot, but often they will get stiffer than normal.
To contrast this, they might use exaggerated gestures or speak with different language than they usually do. The bottom line is, that there are almost no people who can tell you why people lie, but anyone can learn to detect when other people are lying.