Truth-Telling and Trust in Sender-Receiver Games with Intervention: An Experimental Study (original) (raw)

An experimental study of truth-telling in a sender-receiver game

Games and Economic Behavior, 2007

A recent experimental study of Cai and Wang [Cai, H., Wang, J., 2006. Overcommunication in strategic information transmission games. Games Econ. Behav. 95, 384–394] on strategic information transmission reveals that subjects tend to transmit more information than predicted by the standard equilibrium analysis. To evidence that this overcommunication phenomenon can be explained in terms of a tension between normative social behavior and incentives for lying, we show in a simple sender–receiver game that subjects incurring in costs to punish liars tell the truth more often than predicted by the logit agent quantal response equilibria whereas subjects that do not punish liars after receiving a deceptive message play, on the aggregate, equilibrium strategies. Thus, we can partition the subject pool into two groups, one group of subjects with preferences for truth-telling and one taking into account only material incentives.

Truth, trust, and sanctions: On institutional selection in sender-receiver games

2007

This paper reports on a laboratory experiment which investigates the impact of institutions and institutional choice in constant-sum sender-receiver games. We compare individual sender and receiver behavior in two different institutions: A sanction-free institution which is given by the bare sender-receiver game and a sanctioning institution which in addition offers the receiver the opportunity to (costly) sanction the sender after receiving feedback on the senders private information. We conduct the experiment in two phases: First, individuals are randomly assigned to an institution, and second they can choose the institution themselves.We find that sanctioning takes place predominantly after the receiver has trusted a lie by the sender. Those who are responsible for sanctioning are also responsible for truth-telling in excess with respect to models of rational payoff-maximizing agents.Thereby, the sanctioning institution exhibits more truth-telling. Most importantly, agents who sanction reveal preference for the sanctioning institution while the other subjects almost exclusively opt for the sanction-free institution. As a consequence, both institutions typically coexist in the second phase of the experiment and the sanctioning institution exhibits a higher level of truth-telling and lower aggregate material payoffs.To offer an explanation of our experimental findings, we formalize preferences for truth-telling as psychological payoffs and analyze the sender-receiver game as a dynamic psychological game à la Battigalli and Dufwenberg (2006). We demonstrate that standard models of social preferences are not able to explain observed sanctioning behavior and excessive truth-telling. Explicit psychological costs of lying and the exposition to a lie, however, are able to fill this gap. To this end, we model deontological and consequentialistic preferences for truth-telling and evaluate their respective explanatory power.

Enjoy the silence: an experiment on truth-telling

Experimental Economics, 2009

We analyze experimentally two sender-receiver games with conflictive preferences. In the first game, the sender can choose to tell the truth, to lie, or to remain silent. The latter strategy is costly and similar to an outside option. If sent, the receiver can either trust or distrust the sender’s message. In the second game, the receiver must decide additionally whether or not to costly punish the sender after having observed the history of the game. We investigate the existence of two kinds of social preferences: Lie-aversion and preference for truth-telling. In the first game, senders tell the truth more often than predicted by the sequential equilibrium concept, they remain silent frequently, and there exists a positive correlation between the probability of being truthful and the probability of remaining silent. Our main experimental result for the extended game shows that those subjects who punish the sender with a high probability after being deceived are precisely those who send fewer but more truthful messages. We then explore two formal models of the baseline game that can account for our experimental results. First, we fit the data to the logit agent quantal response equilibrium; secondly, we solve for the Perfect Bayesian Nash equilibria of a stylized version of the baseline game with two types of senders. The equilibrium predictions obtained in both cases are consistent with both preferences for truth-telling and lie-aversion although the latter seems to be more pronounced.

Deceitful Communication in a Sender-Receiver Experiment: Does Everyone Have a Price?

Journal of Behavioral and Experimental Economics, 2019

This paper introduces a new task to elicit individual aversion to deceiving, based on a modi…ed version of the Deception Game as presented in Gneezy (Am. Econ. Rev. 95 (1): 384-395: 2005). A multipleprice-list mechanism is used to determine the deception premium asked by an individual to switch from faithful to deceitful communication. The results show that, depending on payo¤s, 71% of the subjects will switch at most once. Among them, 40% appear to be either "ethical" or "spiteful". The other 60% respond to incentives in line with the cost of lying theory; they will forego faithful communication if the bene…t from deceiving the other is large enough. Regression analysis shows that this deception premium is independent of the risk aversion and social preferences of the subject; it would thus capture an inner preference for behaving well.

Do liars believe? Beliefs and other-regarding preferences in sender–receiver games

Journal of Economic Behavior & Organization, 2013

We examine subjects" behavior in sender-receiver games where there are gains from trade and alignment of interests in one of the two states. We elicit subjects" beliefs, risk and other-regarding preferences. Our design also allows us to examine the behavior of subjects in both roles, to determine whether the behavior in one role is the best response to the subject"s own behavior in the other role. The results of the experiment indicate that 60 percent of senders adopt deceptive strategies by sending favorable message when the true state of the nature is unfavorable. Nevertheless, 67 percent of receivers invest conditional upon a favorable message. The investing behavior of receivers cannot be explained by risk preferences or as a best response to subject"s own behavior in the sender"s role. However, it can be rationalized by accounting for elicited beliefs and other-regarding preferences. Finally, the honest behavior of some senders can be explained by other-regarding preferences. Thus we find liars do believe, and individuals who care about the payoffs of others tend to be honest.

Truth-Telling in a Sender–Receiver Game: Social Value Orientation and Incentives

Symmetry

Previous research has discussed the effects of monetary incentives and prosociality on deceptive behavior. However, research has not comprehensively investigated the relationship between these two factors. In the current research, we introduce a repeated two-player sender–receiver binary choice task, where players in the role of senders or receivers receive asymmetric information regarding payoffs, offering the opportunity to explore the effects of economic incentives to lie according to the players’ prosociality. In Experiment 1, players are paired to play the game as a sender or receiver online. We find that economic incentives determine the likelihood of deception from senders and the likelihood that receivers will deviate from the received suggestions. Moreover, prosociality is related to players’ behavior: Prosocial senders send less deceptive messages and prosocial receivers choose options that benefit senders more. Furthermore, senders display consistent behavior when interac...

Experimental Evidence on Deceitful Communication: Does Everyone Have a Price?

SSRN Electronic Journal, 2019

Rewards in an Experimental Sender-Receiver Game

arno.unimaas.nl

We conducted an experiment in which subjects played a sender–receiver game with and without rewarding opportunities. We find that rewards enhance the receiver's propensity to trust the sender's message but do not influence the sender's probability to tell the truth. Moreover, subjects who reward tell the truth and trust more often in the presence and absence of rewarding opportunities.

Trust Me: Communication and Competition in Psychological Games∗

2018

We study theoretically and experimentally a communication market game with and without competition and embed it in a psychological game framework where sellers and buyers incur psychological costs. While the introduction of psychological costs is welfare increasing the introduction of competition is not. This is driven by inordinate amounts of lying by sellers when competition exists while buyers repeatedly tend to trust these dishonest sellers. Finally, in a contrasting treatment where subjects are not subject to psychological costs we find behavior falling back to the standard communication game principal agent problem with a babbling equilibrium without much transmission of information.

Lavish returns on cheap talk: Two-way communication in trust games

2011

We conduct trust game experiments in which subjects can sometimes exchange proposals either in numerical (tabular) form, or using chat messages followed by exchange of numerical proposals. Numerical communication significantly increases trusting and trustworthiness; inclusion of 1-min verbal communication in a chat room generates an even larger and more robust effect.

Truth-Telling and Trust in Sender-Receiver Games with Intervention: An Experimental Study (original) (raw)

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