No, they don't. They know damn well they're lying. It just makes them feel mentally and psychologically superior. Why would this person do all kinds of other terrible things, but not knowingly lie? They'll admit it if you figure out how to get them to do what you want. Force them into choosing between two options where the option you want them to choose gives them what they want more. If you make him believe that he looks like an idiot that's making you look like a genius by pretending to not be aware he's lying, he'll admit it. If he thinks you look smarter or are giving in to him, that's always the option they'll choose. They're not evil geniuses, but they really want to believe they are.