While talk is cheap to some, it is expensive to others for whom moral considerations come into play. We employ a simple two-stage modified prisoner's dilemma game where integrity is endowed on a continuum to analyze when agents will lie in random economic interactions. If there is sufficient integrity in the population, all agents make a promise in the first stage to cooperate in the second. Some agents always lie, some always tell the truth, and some behave conditionally. Enhanced cooperation is a byproduct of integrity.
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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number
2002-39.
Length: 23 pages Date of creation: Aug 2002 Date of revision: Handle: RePEc:uct:uconnp:2002-39
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