Truth, trust, and sanctions: On institutional selection in sender-receiver games
AbstractWe conduct a laboratory experiment to investigate the impact of institutions and institutional choice on truth-telling and trust in sender-receiver games. We find that in an institution with sanctioning opportunities, receivers sanction predominantly after having trusted lies. Individuals who sanction are responsible for truth-telling beyond standard equilibrium predictions and are more likely to choose the sanctioning institution. Sanctioning and non-sanctioning institutions coexist if their choice is endogenous and the former shows a higher level of truth-telling but lower material payoffs. It is shown that our experimental findings are consistent with the equilibrium analysis of a logit agent quantal response equilibrium with two distinct groups of individuals: one consisting of subjects who perceive non-monetary lying costs as senders and non-monetary costs when being lied to as receivers and one consisting of payoff maximizers.
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Bibliographic InfoPaper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2011-28.
Date of creation: Dec 2011
Date of revision:
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Experiment; Sender-receiver games; Strategic information transmission; Institutional selection;
Other versions of this item:
- Ronald Peeters & Marc Vorsatz & Markus Walzl, 2013. "Truth, Trust, and Sanctions: On Institutional Selection in Sender–Receiver Games," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 115(2), pages 508-548, 04.
- Peeters, Ronald & Vorsatz, Marc & Walzl, Markus, 2007. "Truth, trust, and sanctions: On institutional selection in sender-receiver games," Research Memorandum 034, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-19 (All new papers)
- NEP-CBE-2011-12-19 (Cognitive & Behavioural Economics)
- NEP-EXP-2011-12-19 (Experimental Economics)
- NEP-GTH-2011-12-19 (Game Theory)
- NEP-SOC-2011-12-19 (Social Norms & Social Capital)
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