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Enjoy the Silence: An Experiment on Truth-Telling

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Abstract

We analyze experimentally two sender-receiver games with conflictive preferences. In the first game, the sender can choose to tell the truth, to lie, or to remain silent. The latter strategy is costly and similar to an outside option. If sent, the receiver can either trust or distrust the sender’s message. In the second game, the receiver must decide additionally whether or not to costly punish the sender after having observed the history of the game. We investigate the existence of two kinds of social preferences: Lie-aversion and preference for truth-telling. In the first game, senders tell the truth more often than predicted by the sequential equilibrium concept, they remain silent frequently, and there exists a positive correlation between the probability of being truthful and the probability of remaining silent. Our main experimental result for the extended game shows that those subjects who punish the sender with a high probability after being deceived are precisely those who send fewer but more truthful messages. We then explore two formal models of the baseline game that can account for our experimental results. First, we fit the data to the logit agent quantal response equilibrium; secondly, we solve for the Perfect Bayesian Nash equilibria of a stylized version of the baseline game with two types of senders. The equilibrium predictions obtained in both cases are consistent with both preferences for truth-telling and lie-aversion although the latter seems to be more pronounced.

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Bibliographic Info

Paper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 155.

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Length: 36
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:edn:esedps:155

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Keywords: Experiment; Lie-Aversion; Social Preferences; Strategic Information Transmission; Truth-Telling.;

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  1. John W. Dickhaut & Kevin A. McCabe & Arijit Mukherji, 1995. "An experimental study of strategicinformation transmission," Economic Theory, Springer, vol. 6(3), pages 389-403.
  2. Sjaak Hurkens & Navin Kartik, 2006. "(When) Would I Lie To You? Comment on ?Deception: The Role of Consequences?," UFAE and IAE Working Papers 664.06, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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  8. Cai, Hongbin & Wang, Joseph Tao-Yi, 2006. "Overcommunication in strategic information transmission games," Games and Economic Behavior, Elsevier, vol. 56(1), pages 7-36, July.
  9. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
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  11. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
  12. Vincent P. Crawford, 2003. "Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions," American Economic Review, American Economic Association, vol. 93(1), pages 133-149, March.
  13. Amartya Sen, 1997. "Maximization and the Act of Choice," Econometrica, Econometric Society, vol. 65(4), pages 745-780, July.
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