×

zbMATH — the first resource for mathematics

Hiding an inconvenient truth: lies and vagueness. (English) Zbl 1236.91041
Summary: When truth conflicts with efficiency, can verbal communication destroy efficiency? Or are lies or vagueness used to hide inconvenient truths? We consider a sequential 2-player public good game in which the leader has private information about the value of the public good. This value can be low, high, or intermediate, the latter case giving rise to a prisoners’ dilemma. Without verbal communication, efficiency is achieved, with contributions for high or intermediate values. When verbal communication is added, the leader has an incentive to hide the precise truth when the value is intermediate. We show experimentally that, when communication must be precise, the leader frequently lies, preserving efficiency by exaggerating. When communication can be vague, the leader turns to vague messages when the value is intermediate. Thus, she implicitly reveals all values. Interestingly, efficiency is preserved, since the follower does not seem to realize that vague messages hide inconvenient truths.

MSC:
91A65 Hierarchical games (including Stackelberg games)
91B18 Public goods
91B44 Economics of information
91A28 Signaling and communication in game theory
Software:
Z-Tree
PDF BibTeX XML Cite
Full Text: DOI
References:
[1] Agranov, M., Schotter, A., 2009. An experimental study of ambiguity and vagueness in the announcement game. Working paper.
[2] Blume, A., Communication, risk and efficiency in games, Games econ. behav., 22, 171-202, (1998) · Zbl 0896.90180
[3] Blume, A., Board, O.J., 2009. Intentional vagueness. Working paper.
[4] Blume, A.; DeJong, D.; Kim, Y.-G.; Sprinkle, G.B., Experimental evidence on the evolution of the meaning of messages in sender-receiver games, Amer. econ. rev., 88, 1323-1340, (1998)
[5] Blume, A.; DeJong, D.; Kim, Y.-G.; Sprinkle, G.B., Evolution of communication with partial common interest, Games econ. behav., 37, 79-101, (2001)
[6] Blume, A.; Board, O.J.; Kawamura, K., Noisy talk, Theoretical econ., 2, 395-440, (2007)
[7] Bok, S., Lying: moral choice in public and private life, (1978), Harvester Press
[8] Cai, H.; Wang, J.T., Communication in strategic information transmission games, Games econ. behav., 56, 1, 7-36, (2006) · Zbl 1150.91008
[9] Chen, Y., 2009. Perturbed communication games with honest senders and naive receivers. Working paper, Arizona State University.
[10] Chen, Y.; Kartik, N.; Sobel, J., Selecting cheap-talk equilibria, Econometrica, 76, 117-136, (2008) · Zbl 1132.91539
[11] Cho, I.; Kreps, D.M., Signaling games and stable equilibria, Quart. J. econ., CII, 2, 179-221, (1987) · Zbl 0626.90098
[12] Demichelis, S.; Weibull, J.W., Language, meaning, and games: A model of communication, coordination, and evolution, Amer. econ. rev., 98, 4, 1292-1311, (2008)
[13] Dickhaut, J.W.; McCabe, K.A.; Mukherji, A., An experimental study of strategic information transmission, Econ. theory, 6, 389-403, (1995) · Zbl 0840.90042
[14] Erat, S., Gneezy, U., 2009. White lies. Working paper.
[15] Farrell, J., 1985. Credible neologisms in games of communication. MIT Working Paper 386.
[16] Farrell, J., Meaning and credibility in cheap-talk games, Games econ. behav., 5, 4, 514-531, (1993) · Zbl 0790.90091
[17] Fischbacher, U., Z-tree: zurich toolbox for ready-made economic experiments, Exper. econ., 10, 2, 171-178, (2007)
[18] Fischbacher, U., Heusi, F., 2008. Lies in disguise - an experimental study on cheating. Research Paper Series No. 40, Thurgau Institute of Economics and Department of Economics, University of Konstanz.
[19] Forsythe, R.; Lundholm, R.; Rietz, T., Cheap talk, fraud, and adverse selection in financial markets: some experimental evidence, Rev. finan. stud., 12, 3, 481-518, (1999)
[20] Gneezy, U., Deception: the role of consequences, Amer. econ. rev., 95, 1, 384-394, (2005)
[21] Hermalin, B., Toward an economic theory of leadership: leading-by-example, Amer. econ. rev., 88, 1188-1206, (1998)
[22] Hurkens, S.; Kartik, N., (when) would I Lie to you? on social preferences and lying aversion, Exper. econ., 12, 180-192, (2009) · Zbl 1169.91331
[23] Jackall, R., Structural invitations to deceit: some reflections on bureaucracy and morality, Berkshire rev. (special issue on lying and deception), 149-161, (1980)
[24] Jackall, R., Moral mazes: the world of corporate managers, (1988), Oxford University Press
[25] Kartik, N., Strategic communication with lying costs, Rev. econ. stud., 76, 4, 1359-1395, (2009) · Zbl 1186.91046
[26] Kartik, N.; Ottaviani, M.; Squintani, F., Credulity, lies, and costly talk, J. econ. theory, 134, 93-116, (2007) · Zbl 1156.91322
[27] Kohlberg, E.; Mertens, J., On the strategic stability of equilibria, Econometrica, 54, 5, 1003-1037, (1986) · Zbl 0616.90103
[28] Lipman, B.L., 2009. Why is language vague? Working paper, Boston University.
[29] Lundquist, T.; Ellingsen, T.; Gribbe, E.; Johannesson, M., The aversion to lying, J. econ. behav. organ., 70, 1-2, 81-92, (2009)
[30] ()
[31] Potters, J.; Sefton, M.; Vesterlund, L., Leading-by-example and signaling in voluntary contribution games: an experimental study, Econ. theory, 33, 1, 169-182, (2007) · Zbl 1121.91311
[32] Sanchez-Pages, S.; Vorsatz, M., An experimental study of truth-telling in sender-receiver games, Games econ. behav., 61, 86-112, (2007) · Zbl 1271.91032
[33] Sanchez-Pages, S.; Vorsatz, M., Enjoy the silence: an experiment on truth-telling, Exper. econ., 12, 220-241, (2009) · Zbl 1175.91049
[34] Serra-Garcia, M., van Damme, E., Potters, J., 2010. Which words bond? An experiment on signaling in a public good game. CentER Discussion Paper Series No. 2010-33.
[35] Sutter, M., Deception through telling the truth?! experimental evidence from individuals and teams, Econ. J., 119, 47-60, (2009)
[36] Vesterlund, L., The informational value of sequential fundraising, J. public econ., 87, 627-657, (2003)
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.