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Truth by Consensus: A Theoretical and Empirical Investigation

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  • Gabriele Camera, Rod Garratt, Cyril Monnet

Abstract

Truthful reporting about the realization of a publicly observed event cannot be guaranteed by a consensus process. This fact, which we establish theoretically and verify empirically, holds true even if some individuals are compelled to tell the truth, regardless of economic incentives. We document results from an experiment where subjects routinely misreported a commonly known event when they could monetarily gain from it. Relying on majority consensus did not help uncover the truth, especially if complying with the majority granted small personal monetary gains. This highlights the difficulties in relying on shared consensus protocols to agree on specific events, and the importance of institutions with trusted, impartial observers

Suggested Citation

  • Gabriele Camera, Rod Garratt, Cyril Monnet, 2024. "Truth by Consensus: A Theoretical and Empirical Investigation," Diskussionsschriften dp2404, Universitaet Bern, Departement Volkswirtschaft.
    • Handle: RePEc:ube:dpvwib:dp2404
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    File URL: https://repec.vwiit.ch/dp/dp2403.pdf
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    More about this item

    Keywords

    DeFi; digital currency; dishonesty; trust;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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