IDEAS home Printed from https://ideas.repec.org/p/gat/wpaper/2120.html
   My bibliography  Save this paper

The Way People Lie in Markets: Detectable vs. Deniable Lies

Author

Listed:
  • Chloe Tergiman

    (Smeal College of Business, 334 Business Building, Penn State University)

  • Marie Claire Villeval

    (Univ Lyon, CNRS, GATE UMR 5824, 93 Chemin des Mouilles, F-69130, Ecully, France. IZA, Bonn, Germany)

Abstract

In a finitely repeated game with asymmetric information, we experimentally study how individuals adapt the nature of their lies when settings allow for reputation-building. While some lies can be detected ex post by the uninformed party, others remain deniable. We find that traditional market mechanisms such as reputation generate strong changes in the way people lie and lead to strategies in which individuals can maintain plausible deniability: people simply hide their lies better by substituting deniable lies for detectable lies. Our results highlight the limitations of reputation to root out fraud when a Deniable Lie strategy is available.

Suggested Citation

  • Chloe Tergiman & Marie Claire Villeval, 2021. "The Way People Lie in Markets: Detectable vs. Deniable Lies," Working Papers 2120, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    • Handle: RePEc:gat:wpaper:2120
    as

    Download full text from publisher

    File URL: ftp://ftp.gate.cnrs.fr/RePEc/2021/2120.pdf
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Kaisa Kotakorpiⓡ & Tuomas Nurminenⓡ & Topi Miettinen ⓡ & Satu Metsälampiⓡ & Kaisa Kotakorpi, 2022. "Bearing the Burden - Implications of Tax Reporting Institutions and Image Concerns on Evasion and Incidence," CESifo Working Paper Series 9791, CESifo.
    2. Despoina Alempaki & Valeria Burdea & Daniel Read, 2021. "Deceptive Communication: Direct Lies vs. Ignorance, Partial-Truth and Silence," CESifo Working Paper Series 9286, CESifo.

    More about this item

    Keywords

    Lying; Deniability; Reputation; Financial Markets; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    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:gat:wpaper:2120. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Nelly Wirth (email available below). General contact details of provider: https://edirc.repec.org/data/gateefr.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.