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Reducing deception through subsequent transparency - An experimental investigation

Author

Listed:
  • Sascha Behnk

    () (LEE and Economics Department, Universitat Jaume I, Castellón, Spain)

  • Iván Barreda-Tarrazona

    () (LEE and Economics Department, Universitat Jaume I, Castellón, Spain)

  • Aurora García-Gallego

    () (LEE and Economics Department, Universitat Jaume I, Castellón, Spain)

Abstract

Asymmetric information is a common characteristic of economic relationships and often provides incentives to deceive. Being aware of previous findings showing that ex ante transparency about conflicts of interest leads to even more deception, we hypothesize that the timing of disclosing a conflict of interest plays a role in this context. Using different scenarios of a sender-receiver game, we investigate if, instead of providing ex ante information, the effect of an ex post disclosure is to reduce treacherous advice. Our results show that timing actually matters: subsequent transparency significantly reduces deception when it is announced as a threat, which creates awareness of the presence of a whistleblower. An intrinsic motivation seems to play a certain role that goes beyond lying and guilt aversion: embarrassment. Furthermore, we examine if the provision of different alternatives to deception (honest vs. payoff-equalizing messages) has an important impact on individual behavior. We find that honesty is not the most favored alternative to deception. Subsequent transparency increases honest behavior only under particular conditions but strongly increases the tendency to equalize payoffs.

Suggested Citation

  • Sascha Behnk & Iván Barreda-Tarrazona & Aurora García-Gallego, 2012. "Reducing deception through subsequent transparency - An experimental investigation," Working Papers 2012/14, Economics Department, Universitat Jaume I, Castellón (Spain).
  • Handle: RePEc:jau:wpaper:2012/14
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    deception; transparency; disclosure; sender-receiver game; information transmission; behavior; experiment;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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