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How private is private information? The ability to spot deception in an economic game

Author

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  • Belot, Michele
  • van de Ven, Jeroen

Abstract

We provide experimental evidence on the ability to detect deceit in a buyer-seller game with asymmetric information. Sellers have private information about the buyer's valuation of a good and sometimes have incentives to mislead buyers. We examine if buyers can spot deception in face-to-face encounters. We vary (1) whether or not the buyer can interrogate the seller, and (2) the contextual richness of the situation. We find that the buyers' prediction accuracy is above chance levels, and that interrogation and contextual richness are important factors determining the accuracy. These results show that there are circumstances in which part of the information asymmetry is eliminated by people's ability to spot deception.

Suggested Citation

  • Belot, Michele & van de Ven, Jeroen, 2013. "How private is private information? The ability to spot deception in an economic game," SIRE Discussion Papers 2013-111, Scottish Institute for Research in Economics (SIRE).
    • Handle: RePEc:edn:sirdps:536
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    2. Dmitri Bershadskyy & Sunil Ghadwal & Jannik Greif, 2024. "MTVE: Magdeburg tool for video experiments," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 10(2), pages 609-619, December.
    3. Ivan Balbuzanov, 2019. "Lies and consequences," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1203-1240, December.
    4. Sanchaita Hazra & Marta Serra-Garcia, 2025. "Understanding Trust in AI as an Information Source: Cross-Country Evidence," CESifo Working Paper Series 11954, CESifo.
    5. Lohse, Tim & Qari, Salmai, 2021. "Gender differences in face-to-face deceptive behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 1-15.
    6. Subhasish M. Chowdhury & Joo Young Jeon & Chulyoung Kim & Sang-Hyun Kim, 2021. "Gender Differences in Repeated Dishonest Behavior: Experimental Evidence," Games, MDPI, vol. 12(2), pages 1-11, May.
    7. Peter Schwardmann & Joël van der Weele, 2016. "Deception and Self-Deception," Tinbergen Institute Discussion Papers 16-012/I, Tinbergen Institute.
    8. Dwenger, Nadja & Lohse, Tim, 2019. "Do individuals successfully cover up their lies? Evidence from a compliance experiment," Journal of Economic Psychology, Elsevier, vol. 71(C), pages 74-87.
    9. Belot, Michèle & van de Ven, Jeroen, 2019. "Is dishonesty persistent?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    10. Dmitri Bershadskyy & Laslo Dinges & Marc-André Fiedler & Ayoub Al-Hamadi & Nina Ostermaier & Joachim Weimann, 2024. "Experimental economics for machine learning—a methodological contribution on lie detection," PLOS ONE, Public Library of Science, vol. 19(12), pages 1-19, December.
    11. Camille Srour & Jacques Py, 2024. "Deception in Negotiations: Making People More Honest with a Two-Factor Approach," Group Decision and Negotiation, Springer, vol. 33(6), pages 1471-1494, December.

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    Keywords

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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