IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/05018.html
   My bibliography  Save this paper

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

Author

Listed:
  • Toshiji Kawagoe
  • Hirokazu Takizawa

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 oneshot, 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.

Suggested Citation

  • Toshiji Kawagoe & Hirokazu Takizawa, 2005. "Why Lying Pays: Truth Bias in the Communication with Conflicting Interests," Discussion papers 05018, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:05018
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/05e018.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stahl Dale O. & Wilson Paul W., 1995. "On Players' Models of Other Players: Theory and Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 10(1), pages 218-254, July.
    2. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
    3. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 179-221.
    4. Farrell Joseph, 1993. "Meaning and Credibility in Cheap-Talk Games," Games and Economic Behavior, Elsevier, vol. 5(4), pages 514-531, October.
    5. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    6. Matthews, Steven A. & Okuno-Fujiwara, Masahiro & Postlewaite, Andrew, 1991. "Refining cheap-talk equilibria," Journal of Economic Theory, Elsevier, vol. 55(2), pages 247-273, December.
    7. Rubinstein,Ariel, 2000. "Economics and Language," Cambridge Books, Cambridge University Press, number 9780521789905, September.
    8. Vincent P. Crawford, 2003. "Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions," American Economic Review, American Economic Association, vol. 93(1), pages 133-149, March.
    9. Blume, Andreas & DeJong, Douglas V. & Kim, Yong-Gwan & Sprinkle, Geoffrey B., 2001. "Evolution of Communication with Partial Common Interest," Games and Economic Behavior, Elsevier, vol. 37(1), pages 79-120, October.
    10. Milgrom, Paul & Roberts, John, 1982. "Predation, reputation, and entry deterrence," Journal of Economic Theory, Elsevier, vol. 27(2), pages 280-312, August.
    11. Tetsuo Yamamori & Kazuhiko Kato & Toshiji Kawagoe & Akihiko Matsui, 2008. "Voice matters in a dictator game," Experimental Economics, Springer;Economic Science Association, vol. 11(4), pages 336-343, December.
    12. Jacob Glazer & Ariel Rubinstein, 2004. "On Optimal Rules of Persuasion," Econometrica, Econometric Society, vol. 72(6), pages 1715-1736, November.
    13. Rabin, Matthew & Sobel, Joel, 1996. "Deviations, Dynamics, and Equilibrium Refinements," Journal of Economic Theory, Elsevier, vol. 68(1), pages 1-25, January.
    14. John W. Dickhaut & Kevin A. McCabe & Arijit Mukherji, 1995. "An experimental study of strategicinformation transmission," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(3), pages 389-403.
    15. Russell Cooper & Douglas V. DeJong & Robert Forsythe & Thomas W. Ross, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 739-771.
    16. Crawford, Vincent, 1998. "A Survey of Experiments on Communication via Cheap Talk," Journal of Economic Theory, Elsevier, vol. 78(2), pages 286-298, February.
    17. Warneryd Karl, 1993. "Cheap Talk, Coordination, and Evolutionary Stability," Games and Economic Behavior, Elsevier, vol. 5(4), pages 532-546, October.
    18. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    19. Joyce E. Berg & Lane A. Daley & John W. Dickhaut & John R. O'Brien, 1986. "Controlling Preferences for Lotteries on Units of Experimental Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 281-306.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cabrales, Antonio & Feri, Francesco & Gottardi, Piero & Meléndez-Jiménez, Miguel A., 2020. "Can there be a market for cheap-talk information? An experimental investigation," Games and Economic Behavior, Elsevier, vol. 121(C), pages 368-381.
    2. Antonio Cabrales & Michalis Drouvelis & Zeynep Gurguy & Indrajit Ray, 2017. "Transparency is Overrated: Communicating in a Coordination Game with Private Information," CESifo Working Paper Series 6781, CESifo.
    3. Cabrales, Antonio & Feri, Francesco & Gottardi, Piero & Meléndez-Jiménez, Miguel A., 2021. "Communication and social preferences: an experimental analysis," CEPR Discussion Papers 15711, C.E.P.R. Discussion Papers.
    4. Kawagoe, Toshiji & Takizawa, Hirokazu, 2009. "Equilibrium refinement vs. level-k analysis: An experimental study of cheap-talk games with private information," Games and Economic Behavior, Elsevier, vol. 66(1), pages 238-255, May.
    5. Cabrales, Antonio; Feri, Francesco; Gottardi, Piero; Meléndez-Jiménez, Miguel A., 2016. "Can there be a market for cheap-talk information? Some experimental evidence," Economics Working Papers ECO2016/07, European University Institute.
    6. Holm, Håkan J. & Kawagoe, Toshiji, 2010. "Face-to-face lying - An experimental study in Sweden and Japan," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 310-321, June.
    7. Cabrales, Antonio & Drouvelis, Michalis & Gurguc, Zeynep & Ray, Indrajit, 2018. "Do we need to listen to all stakeholders?: communicating in a coordination game with private information," Cardiff Economics Working Papers E2018/23, Cardiff University, Cardiff Business School, Economics Section.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toshiji Kawagoe & Hirokazu Takizawa, 2005. "Why Lying Pays: Truth Bias in the Communication with Conflicting Interests," Experimental 0503005, University Library of Munich, Germany.
    2. Kawagoe, Toshiji & Takizawa, Hirokazu, 2009. "Equilibrium refinement vs. level-k analysis: An experimental study of cheap-talk games with private information," Games and Economic Behavior, Elsevier, vol. 66(1), pages 238-255, May.
    3. Chen, Ying, 2011. "Perturbed communication games with honest senders and naive receivers," Journal of Economic Theory, Elsevier, vol. 146(2), pages 401-424, March.
    4. Olszewski, Wojciech, 2006. "Rich language and refinements of cheap-talk equilibria," Journal of Economic Theory, Elsevier, vol. 128(1), pages 164-186, May.
    5. Vincent P. Crawford, 2003. "Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions," American Economic Review, American Economic Association, vol. 93(1), pages 133-149, March.
    6. de Groot Ruiz, Adrian & Offerman, Theo & Onderstal, Sander, 2015. "Equilibrium selection in experimental cheap talk games," Games and Economic Behavior, Elsevier, vol. 91(C), pages 14-25.
    7. Blume, Andreas & DeJong, Douglas V. & Kim, Yong-Gwan & Sprinkle, Geoffrey B., 2001. "Evolution of Communication with Partial Common Interest," Games and Economic Behavior, Elsevier, vol. 37(1), pages 79-120, October.
    8. Adrian Groot Ruiz & Theo Offerman & Sander Onderstal, 2014. "For those about to talk we salute you: an experimental study of credible deviations and ACDC," Experimental Economics, Springer;Economic Science Association, vol. 17(2), pages 173-199, June.
    9. Olszewski, Wojciech, 2004. "Informal communication," Journal of Economic Theory, Elsevier, vol. 117(2), pages 180-200, August.
    10. Lai, Ernest K. & Lim, Wooyoung, 2012. "Authority and communication in the laboratory," Games and Economic Behavior, Elsevier, vol. 74(2), pages 541-560.
    11. Ismail Saglam & Mehmet Y. Gurdal & Ayca Ozdogan, 2011. "Truth-telling and Trust in Sender-receiver Games with Intervention," Koç University-TUSIAD Economic Research Forum Working Papers 1123, Koc University-TUSIAD Economic Research Forum.
    12. Johanna Hertel & John Smith, 2013. "Not so cheap talk: costly and discrete communication," Theory and Decision, Springer, vol. 75(2), pages 267-291, August.
    13. David Ettinger & Philippe Jehiel, 2021. "An experiment on deception, reputation and trust," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 821-853, September.
    14. Birger Wernerfelt, 2004. "Organizational Languages," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(3), pages 461-472, September.
    15. Hu, Youxin & Kagel, John & Yang, Huanxing & Zhang, Lan, 2020. "The effects of pre-play communication in a coordination game with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 403-415.
    16. Blume, Andreas & Lai, Ernest K. & Lim, Wooyoung, 2019. "Eliciting private information with noise: The case of randomized response," Games and Economic Behavior, Elsevier, vol. 113(C), pages 356-380.
    17. Cai, Hongbin & Wang, Joseph Tao-Yi, 2006. "Overcommunication in strategic information transmission games," Games and Economic Behavior, Elsevier, vol. 56(1), pages 7-36, July.
    18. Peter Eso & James Schummer, 2005. "Robust Deviations from Signaling Equilibria," Discussion Papers 1406, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    19. Rode, Julian, 2007. "Truth and Trust in Communication: An Experimental Study of Behavior under Asymmetric Information," Ratio Working Papers 111, The Ratio Institute.
    20. Stefano Demichelis & Jorgen W. Weibull, 2008. "Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution," American Economic Review, American Economic Association, vol. 98(4), pages 1292-1311, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:05018. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.