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Lying through Their Teeth: Third Party Advice and Truth Telling in a Strategy Proof Mechanism

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  • Guillén, Pablo
  • Hing, Alexander

Abstract

We test the effect of advice on the well known top trading cycles (TTC) matching algorithm in a school choice frame work. We compare three treatments involving third party advice [right advice (R), wrong advice (W), and both right and wrong advice (RW)] to a no-advice baseline (B). In line with previous literature the truth telling rate is higher than 80% in the baseline, but it becomes as low as 35% in the W treatment. Truth telling rates are also significantly lower in R than in B, and much lower in RW than in B. This evidence suggests that a vast majority of participants in our experiment were confused. Truth telling seems to work only as a default strategy, and participants can be heavily influenced by advice. The real life implementation of matching mechanisms may have been misguided by some laboratory experimentation.

Suggested Citation

  • Guillén, Pablo & Hing, Alexander, 2013. "Lying through Their Teeth: Third Party Advice and Truth Telling in a Strategy Proof Mechanism," Working Papers 2013-11, University of Sydney, School of Economics.
  • Handle: RePEc:syd:wpaper:2123/9255
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Min Zhu, 2015. "Experience Transmission : Truth-telling Adoption in Matching," Working Papers 1518, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    2. Ran I. Shorrer & Sandor Sovago, 2017. "Obvious Mistakes in a Strategically Simple College Admissions Environment," Tinbergen Institute Discussion Papers 17-107/V, Tinbergen Institute.
    3. repec:kap:expeco:v:20:y:2017:i:3:d:10.1007_s10683-016-9505-0 is not listed on IDEAS
    4. Hugh-Jones, David & Kurino, Morimitsu & Vanberg, Christoph, 2014. "An experimental study on the incentives of the probabilistic serial mechanism," Games and Economic Behavior, Elsevier, vol. 87(C), pages 367-380.
    5. Min Zhu, 2015. "Experience Transmission: Truth-telling Adoption in Matching," Working Papers halshs-01176926, HAL.
    6. Flip Klijn & Joana Pais & Marc Vorsatz, 2016. "Static versus Dynamic Deferred Acceptance in School Choice: Theory and Experiment," Working Papers 926, Barcelona Graduate School of Economics.
    7. repec:eee:gamebe:v:108:y:2018:i:c:p:317-330 is not listed on IDEAS
    8. Klijn, Flip & Pais, Joana & Vorsatz, Marc, 2016. "Affirmative action through minority reserves: An experimental study on school choice," Economics Letters, Elsevier, vol. 139(C), pages 72-75.
    9. repec:eee:eecrev:v:101:y:2018:i:c:p:505-511 is not listed on IDEAS
    10. Hakimov, Rustamdjan & Kesten, Onur, 2014. "The equitable top trading cycles mechanism for school choice," Discussion Papers, Research Unit: Market Behavior SP II 2014-210, WZB Berlin Social Science Center.
    11. repec:eee:gamebe:v:103:y:2017:i:c:p:94-115 is not listed on IDEAS
    12. Guillen, Pablo & Hakimov, Rustamdjan, 2014. "Monkey see, monkey do: Truth-telling in matching algorithms and the manipulation of others," Discussion Papers, Research Unit: Market Behavior SP II 2014-202, WZB Berlin Social Science Center.
    13. Guillén, Pablo & Hakimov, Rustamdjan, 2015. "How to get truthful reporting in matching markets: A field experiment," Discussion Papers, Research Unit: Market Behavior SP II 2015-208, WZB Berlin Social Science Center.
    14. Guillen, Pablo & Hakimov, Rustamdjan, 2015. "Less is more: A Field Experiment on Matching," Working Papers 2015-16, University of Sydney, School of Economics.
    15. repec:syd:wpaper:2123/9951 is not listed on IDEAS

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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