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Truth and trust in communication: Experiments on the effect of a competitive context

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  • Rode, Julian

Abstract

The paper analyses the results of a Communication Game in a cooperative or a competitive context. In this game, decision makers face uncertainty about the consequences of their choice, but can rely on recommendations from advisors. Financial incentives between alternatives are not aligned for the two players, which produces an incentive to lie. While many advisors tell the truth against their monetary self-interest, the propensity to tell the truth is unaffected by the contextual variation. In contrast, decision makers show less trust in a competitive context, but only when they have no explicit information about the payoff alignment. The context seems to shape their belief about the situation. The data of this study is largely in line with Subjective Equilibrium Analysis [Kalai, E., Lehrer, E., 1995. Subjective games and equilibria. Games Econ. Behav. 8 (1), 123-163].

Suggested Citation

  • Rode, Julian, 2010. "Truth and trust in communication: Experiments on the effect of a competitive context," Games and Economic Behavior, Elsevier, vol. 68(1), pages 325-338, January.
  • Handle: RePEc:eee:gamebe:v:68:y:2010:i:1:p:325-338
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jacob Goeree & Jingjing Zhang, 2014. "Communication & competition," Experimental Economics, Springer;Economic Science Association, vol. 17(3), pages 421-438, September.
    2. Gerald Eisenkopf & Ruslan Gurtoviy & Verena Utikal, 2011. "Size matters - when it comes to lies," TWI Research Paper Series 66, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    3. Friesen, Lana & Gangadharan, Lata, 2013. "Designing self-reporting regimes to encourage truth telling: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 90-102.
    4. Leif Brandes & Donja Darai, 2014. "The value of top-down communication for organizational performance," ECON - Working Papers 157, Department of Economics - University of Zurich.
    5. Ismayilov, Huseyn & Potters, Jan, 2013. "Disclosing advisor's interests neither hurts nor helps," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 314-320.
    6. Behnk, Sascha & Barreda-Tarrazona, Iván & García-Gallego, Aurora, 2014. "The role of ex post transparency in information transmission—An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 45-64.
    7. Reuben, Ernesto & Stephenson, Matt, 2013. "Nobody likes a rat: On the willingness to report lies and the consequences thereof," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 384-391.
    8. Galanis, Spyros & Vlassopoulos, Michael, 2014. "Concern for relative standing and deception," Discussion Paper Series In Economics And Econometrics 1403, Economics Division, School of Social Sciences, University of Southampton.
    9. Utikal, Verena & Fischbacher, Urs, 2013. "Disadvantageous lies in individual decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 108-111.
    10. Angelova, Vera & Regner, Tobias, 2013. "Do voluntary payments to advisors improve the quality of financial advice? An experimental deception game," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 205-218.
    11. Jean-Fabrice Lebraty & Katia Lobre, 2010. "Contrôle de l'information et crowdsourcing," Post-Print halshs-00545788, HAL.
    12. Gibson, Rajna & Tanner, Carmen & Wagner, Alexander F, 2014. "The Choice of Honesty: An Experiment Regarding Heterogeneous Responses to Situational Social Norms," CEPR Discussion Papers 9880, C.E.P.R. Discussion Papers.
    13. Verena Utikal, 2013. "I am sorry - Honest and Fake Apologies," Working Paper Series of the Department of Economics, University of Konstanz 2013-18, Department of Economics, University of Konstanz.
    14. Reuben, Ernesto & Stephenson, Matthew, 2012. "Nobody Likes a Rat: On the Willingness and Consequences of Reporting Lies," IZA Discussion Papers 6998, Institute for the Study of Labor (IZA).
    15. Mariya Teteryatnikova & James Tremewan, 2016. "An offer you can refuse: the effects of transparency with endogenous conflict of interest," Vienna Economics Papers 1602, University of Vienna, Department of Economics.
    16. Kim, Moshe & Surroca, Jordi & Tribó, Josep A., 2014. "Impact of ethical behavior on syndicated loan rates," Journal of Banking & Finance, Elsevier, vol. 38(C), pages 122-144.

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