Enjoy the silence: an experiment on truth-telling

Sánchez‐Pagés, Santiago; Vorsatz, Marc

doi:10.1007/s10683-008-9211-7

Cited by 96 publications

(46 citation statements)

References 23 publications

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“…The authors find that those subjects who punished lies with a higher probability are 5 those who exhibited higher rates of truth-telling in case they choose to send a message. Besides, similarly to our results, Sánchez-Pagés and Vorsatz (2009) show that the introduction of punishment does not increase the rate of truth-telling while senders switch to staying silent somewhat more often. At the same time, their setting had important differences from ours.…”

Section: Related Literaturesupporting

confidence: 91%

“…These costs were shown to depend on the monetary consequences of a lie for both the sender and the receiver of the message (Gneezy 2005), senders' beliefs about the receiver (Sutter 2009, Beck et al 2013, form of communication (Lundquist et al 2009), or game experience (Gneezy et al 2013). Several papers so far considered the effect of the possibility of evasive communication (such as staying silent or using vague messages) on the informativeness of communication (see Sánchez-Pagés and Vorsatz 2009, Serra-Garcia et al 2011, Agranov and Schotter 2012. These studies show that many subjects use such communication patterns to circumvent both explicit lying and truth-telling.…”

Section: Related Literaturementioning

confidence: 99%

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Evasive lying in strategic communication

Khalmetski

Rockenbach

Werner

2017

Journal of Public Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. 18 January 2017 Terms of use: Documents in EconStor may AbstractInformation asymmetries in economic transactions are omnipresent and a regular source of fraudulent behavior. In a theoretical and an experimental analysis of a sender-receiver game we investigate whether sanctions for lying induce more truthtelling. The novel aspect in our model is that senders may not only choose between truth-telling and (explicit) lying, but may also engage in evasive lying by credibly pretending not to know. While we find that sanctions promote truth-telling when senders cannot engage in evasive lying, this is no longer true when evasive lying is possible. Then, explicit lying is largely substituted by evasive lying, which completely eliminates the otherwise positive effect of sanctions on the rate of truthtelling. As outlined in our model, the necessary prerequisite for such an 'erosion' effect is that evasive lying is perceived as sufficiently less psychologically costly than direct lying. Our results clearly demonstrate the limitations of sanctioning lying to counteract the exploitation of informational asymmetries and may explain the empirical evidence from the finance industry that sanctions for financial misconduct eventually appear to be not very efficient.

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Section: Related Literaturesupporting

confidence: 91%

Section: Related Literaturementioning

confidence: 99%

Evasive lying in strategic communication

Khalmetski

Rockenbach

Werner

2017

Journal of Public Economics

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“…At the same time, for low levels of k lying is not very costly and the equilibrium messages m(t) are well above t. This implies in turn that the value of t for which m(t) = 10; is low. 19 Clearly, cuto¤ level t should be below t: Therefore, if k is small the separating segment should be short. When both b and k are su¢ ciently small the opposite requirements are incompatible and a LSHP does not exist.…”

Section: A2 Equilibria In the Presence Of Lying Costsmentioning

confidence: 99%

Money Talks? An Experimental Investigation of Cheap Talk and Burned Money

2011

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We experimentally study the strategic transmission of information in a setting where both cheap talk and money can be used for communication purposes. Theoretically a large number of equilibria exist side by side, in which senders either use costless messages, money, or a combination of the two. We …nd that senders prefer to communicate through costless messages. Only when the interest disalignment between sender and receiver increases, cheap talk tends to break down and high sender types start burning money to enhance the credibility of their costless messages. A behavioral model due to Kartik (2009) assuming that sellers bear a cost of lying …ts the data best.

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“…Other researchers have suggested that some individuals are simply lying-averse (Gneezy, 2005;Hurkens & Kartik, 2009), guiltaverse (Charness & Dufwenberg, 2006), sensitive to financial gains (Gibson et al, 2013;Ismayilov & Potters, 2013), justifiability (Erat, 2013;Erat & Gneezy, 2011), or motivated by a combination of factors such as financial gains, justifiability and a personal utility of honesty (Sakamoto et al, 2013). Another common finding from experimental literature is that investors rely more on the underwriters' reports than would be expected based on theoretical predictions (Kawagoe & Takizawa, 2008;Sanchez-Pages & Vorsatz, 2009). Deception is successful because investors appear receptive.…”

Section: Introductionmentioning

confidence: 99%

Deception and reception: The behavior of information providers and users

Sheremeta

Shields

2017

Journal of Economic Behavior & Organization

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We investigate the behavior of information providers (underwriters) and users (investors) in a controlled laboratory experiment where underwriters have incentives to deceive and investors have incentives to avoid deception. Participants play simultaneously as underwriters and investors in one-shot information transmission games. The results of our experiment show a significant proportion of both deceptive and non-deceptive underwriters. Despite the presence of deceptive underwriters, investors are receptive to underwriters' reports, gleaning information content, albeit overly optimistic. Within our sample, deception by underwriters and reception by investors are the most profitable strategies. Moreover, participants who send deceptive reports to investors, but at the same time are receptive to reports of underwriters, earn the highest payoffs. These results call into question the characterization of duped investors being irrational.

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Enjoy the silence: an experiment on truth-telling

Abstract: Experiment, Lying aversion, Social preferences, Strategic information transmission, Truth-telling, C72, C73, D83,

Cited by 96 publications

References 23 publications

Evasive lying in strategic communication

Evasive lying in strategic communication

Money Talks? An Experimental Investigation of Cheap Talk and Burned Money

Deception and reception: The behavior of information providers and users

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