James Katz, a professor of communication at Rutgers University, has studied the phenomenon of people who fake calls on cell phones. He's found that a very high number of people do this (above 90%). Reasons include: to avoid talking to someone nearby, to look important, or to look busier than they are. Katz has been quoted as saying: "They are taking a device that was designed to talk to people who are far away and using it to communicate with people who are directly around them."
Two apps available for the iPhone demonstrate the robustness of this trend: Fake Calls will make it look like you just received a call. Similarly, Fake Text will make it look like you just received an SMS text message.
Since I don't have a cell phone, let alone an iPhone, I won't be needing these.