The power of words: A model of honesty and fairness

We develop a game-theoretical model of honesty and fairness to study cooperation in social dilemma games with communication. It is based on two key intuitions. First, players suffer a utility cost if they break norms of honesty and fairness, and this cost is highest if most others comply with the norm. Second, people are heterogeneous with regard to their concern for norms. We show that a model based on honesty norms alone cannot explain why pre-play communication fosters cooperation in simultaneous social dilemmas. In contrast, the model based on norms of honesty and fairness can. We also illustrate other predictions of the model, offering experimental evidence in line with them – e.g., the effect of communication on cooperation depends on how many players communicate, and whether the social dilemma is played simultaneously or sequentially. In addition, ideas for new experiments are suggested.