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Why Lying Pays: Truth Bias in the Communication with Conflicting Interests

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Author Info
Toshiji Kawagoe (Future University - Hakodate)
Hirokazu Takizawa (Research Institute of Economy, Trade & Industry)
Abstract

We conduct experiments of a cheap-talk game with incomplete information in which one sender type has an incentive to misrepresent her type. Although that Sender type mostly lies in the experiments, the Receiver tends to believe the Sender's messages. This confirms ``truth bias'' reported in communication theory in a one-shot, anonymous environment without nonverbal cues. These results cannot be explained by existing refinement theories, while a bounded rationality model explains them under certain conditions. We claim that the theory for the evolution of language should address why truthful communication survives in the environment in which lying succeeds.

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Paper provided by EconWPA in its series Experimental with number 0503005.

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Length: 41 pages
Date of creation: 22 Mar 2005
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Handle: RePEc:wpa:wuwpex:0503005

Note: Type of Document - pdf; pages: 41
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Related research
Keywords: Cheap talk; Communication; Private information; Experiment; Equilibrium refinement; Bounded rationality; Truth bias;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

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  2. Tetsuo Yamamori & Kazuhiko Kato & Toshiji Kawagoe & Akihiko Matsui, 2004. "Voice Matters in a Dictator Game," CIRJE F-Series CIRJE-F-302, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
    Other versions:
  3. Cooper, Russell, et al, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 739-71, May. [Downloadable!] (restricted)
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  8. Warneryd Karl, 1993. "Cheap Talk, Coordination, and Evolutionary Stability," Games and Economic Behavior, Elsevier, vol. 5(4), pages 532-546, October. [Downloadable!] (restricted)
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  10. Steven A. Matthews & M. Okuno-Fujiwara & Andrew Postlewaite, 1990. "Refining Cheap-Talk Equilibria," Discussion Papers 892R, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  11. COOPER, R. & DEJONG, D.V. & FORSYTHE, R. & Tom Ross, 1989. "Communication In Coordination Games," Carleton Industrial Organization Research Unit (CIORU) 89-07, Carleton University, Department of Economics.
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  13. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August. [Downloadable!] (restricted)
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  14. Berg, Joyce E, et al, 1986. "Controlling Preferences for Lotteries on Units of Experimental Exchange," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 281-306, May. [Downloadable!] (restricted)
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