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Truth and trust in communication : experiments on the effect of a competitive context

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  • Rode, Julian

Abstract

The paper employs laboratory experimentation to study the effect of competition on truth telling and trust in communication. A sequence of either competitive or cooperative interactions preceded an experimental communication game. In the game, informed advisors sent a recommendation to decision-makers who faced uncertainty about the consequences of their choice. While many advisors told the truth against their monetary self-interest, the propensity to tell the truth was unaffected by the contextual priming. In contrast, decision-makers trusted significantly less in a competitive context. The effect was strongest when they faced full uncertainty. The paper relates this result to psychological and neuro-economic findings on automatic information processing. The data of this study were largely in line with Subjective Equilibrium Analysis (Kalai and Lehrer, 1995).

Suggested Citation

  • Rode, Julian, 2008. "Truth and trust in communication : experiments on the effect of a competitive context," Papers 08-04, Sonderforschungsbreich 504.
    • Handle: RePEc:mnh:spaper:2307
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    File URL: https://madoc.bib.uni-mannheim.de/2307/1/dp08_04.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    experimental economics ; truth telling ; trust ; asymmetric information ; context effects ; competition ; automatic information processing;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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