When our DD began experimenting with lying, around 3, we caught her at it several times, and then when she told us something later, we indicated how we couldn't be sure she was telling us the truth, because she'd lied before, and now we didn't know what to believe. That loss of trust stung her pretty badly. I also told an abbreviated version of The Boy Who Cried Wolf to her at least half a dozen times.
Now at 8, she still reacts in outrage if we doubt her word, so the lesson stuck pretty well.
However, our family does have a habit of pranking each other with ludicrous stories. The more ludicrous the story, and the longer you can string someone along in belief, the better. We do this to teach DD critical thinking skills, but DW and I had done this for years before we had DD.
DW still tells the story of how long DD strung her along with a tale of iron-fisted justice and hidden-camera surveillance conducted by DD's K teacher.
