Biased Information and Effort
We study the impact of information manipulation by a principal on the agent's effort. In a context of asymmetric information at the principal's advantage, we test experimentally the principal's willingness to bias (overestimate or under-estimate) the information she gives to her agent on his ability in order to motivate him to exert more effort. We find that i) principals do bias information, ii) agents trust the cheap-talk messages they receive and adjust their effort accordingly. Therefore, biased messages improve both the agent's performance and thus the principal's proﬁt. This, however, does not increase efficiency. We also ﬁnd that over-estimation occurs much more often than under-estimation. Making the signal costly in an additional treatment reduces this effect.
|Date of creation:||2012|
|Publication status:||Published in Economic Inquiry, Wiley, 2012, 50 (2), pp. 484-501|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00527563|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Santiago Sánchez-Pagés & Marc Vorsatz, 2009.
"Enjoy the silence: an experiment on truth-telling,"
Springer;Economic Science Association, vol. 12(2), pages 220-241, June.
When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00527563. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.