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The power of words: A model of honesty and fairness

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  • López-Pérez, Raúl

Abstract

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.

Suggested Citation

  • López-Pérez, Raúl, 2012. "The power of words: A model of honesty and fairness," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 642-658.
  • Handle: RePEc:eee:joepsy:v:33:y:2012:i:3:p:642-658
    DOI: 10.1016/j.joep.2011.12.004
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    Citations

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    Cited by:

    1. Matthew W. McCarter & Anya C. Samak & Roman M. Sheremeta, 2013. "Divided Loyalties or Conditional Cooperation? An experimental study of contributions to multiple public goods," Working Papers 13-08, Chapman University, Economic Science Institute.
    2. Feltovich, Nick & Giovannoni, Francesco, 2015. "Selection vs. accountability: An experimental investigation of campaign promises in a moral-hazard environment," Journal of Public Economics, Elsevier, vol. 126(C), pages 39-51.
    3. 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).
    4. Abeler, Johannes & Becker, Anke & Falk, Armin, 2014. "Representative evidence on lying costs," Journal of Public Economics, Elsevier, vol. 113(C), pages 96-104.
    5. 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.
    6. Anbarcı, Nejat & Feltovich, Nick & Gürdal, Mehmet Y., 2015. "Lying about the price? Ultimatum bargaining with messages and imperfectly observed offers," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 346-360.

    More about this item

    Keywords

    Communication; Cooperation; Fairness; Heterogeneity; Honesty; Reciprocity; Social norms;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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